Finding the right location to suit your business
The location and premises you choose will depend on what you’re doing. If you don’t need specific premises like a shop, café or workshop, you might want to work form home, at least in the early days. This will save money and if you’re only using a spare room as an office, you won’t need planning permission. You can also offset the costs of working from home against profits when calculating income tax.
A major disadvantage is that you’ll have to be very disciplined in your work/life balance and not allow work to take over at home. Another potential disadvantage is that if clients are likely to come to you, it doesn’t look very professional holding business meetings in your living room. There are alternatives though, and it may be better to have some meetings at a local coffee shop or café.
If you do need premises outside home, it’s all about getting the right premises in the right location. If you’re in retail or running a café, restaurant or bar, you’ll want to be in a busy place with plenty going on, like the high street or a shopping centre.
Location can be just as important for an office. You need to think about car parking, accessibility and proximity to services like your bank. If you need a small space, working in a communal, open plan office with lots of others around you can be a very useful solution. You’ll have the buzz of an office environment and people can chat with and bounce ideas off. If it’s a workshop or small industrial unit, you’ll want somewhere secure and with good access for deliveries.
You can rent, buy or lease premises for a fixed period. Set yourself a maximum monthly payment and stick to it have a chat with your accountant for advice on the best option. To find out what’s available, talk to estate agents who specialise in commercial property or contact your local authority to see what premises they own and rent. Your local Chamber of Commerce can also be a useful contact for finding premises. Read the Business Wales guide on Choosing the Right Premises for your Business (Business Wales website) for more useful tips.
Legal requirements Tax and all that stuff
If you’re good with figures, tax and VAT shouldn’t be too much of a problem. As a self-employed person, you’ll no longer be having your tax deducted at source through PAYE (Pay As You Earn). Now the responsibility for your tax affairs will be your own.
The Inland Revenue will send you the standard Self-Assessment tax form to complete. Once it’s been submitted you will be sent your tax demand. You will have to make two payments a year – one at the end of January and one at the end of July. Make sure you’re putting money aside so that when the twice-yearly demand arrives at your doorstep, you can meet it.
VAT is the tax charged on certain products and services. The threshold at which a business must register for VAT is set each year in the Government’s Budget. If your turnover is above the threshold, you must register with HM Customs and Excise. You collect VAT on goods and services you sell and deduct VAT on goods and services you buy. You then either pay or claim back the difference from HM Customs and Excise. You can call HM Customs and Excise national advice service on: 0845 010 9000.
If you’re not good with figures or would prefer to devote all your time to the business itself, hire a book-keeper or accountant or both. A book-keeper will keep your books up-to-date, an accountant will prepare your annual accounts for tax purposes and, once you’ve signed your tax form, present it to Inland Revenue on your behalf. But don’t use a book-keeper or accountant as an excuse not to keep a tight grip on what’s going on in the business. They’re there to help you – but you’re in charge. Your local business support service provides courses on how to learn the financial ropes – so take advantage and get wise. Read more articles on Tax and VAT (Business Wales website) on the Business Wales website.