Six easy steps to set up a UK business – Part Five

This is the fifth episode in the six-step guide to setting up your own business and, as a Cat Stevens song once explained, we’ve come a long way.

We have already spoken about how easy it is to get started and how these straitened and austere times mean that becoming an entrepreneur is not only a good option, it can sometimes be the only option. Employment really isn’t what it used to be and probably never will be again. We are no longer a country of shopkeepers; we are a nation of businessmen.

You lucky people have even been given a special offer that means it only costs £1 with the code ONEQUID to incorporate your limited company and a tip from personal experience on whether to use a traditional or an online accountancy service. You would have to be a monkey with a gizmo to feel any fear about setting up on your own.

You’ve also been given some fairly straightforward advice about when you should submit invoices and that you may have to brace yourself for late payment and sometimes no payment at all. Furthermore we’ve discussed the ethics of being professional in your dealings with your clients, suppliers and how you should respect the tax man, not resent him. Tax avoidance is fine; tax evasion is criminal.

Finally, I’ve also shown you which expenses you can claim, be it entertainment costs, taxis, laptops or even gifts and how you must start budgeting from the outset so there are no unpleasant surprises from National Insurance payments or the aforesaid tax man.

So when do you have to stump on cash? Well, the beauty of setting up your own business is that you get a period of grace, one that is respected by any new business. In my case, I set up my company in July 2011 and my first tranche of bi-yearly payments doesn’t come until January 2013 (!). That may seem like a long time, but I would reiterate my earlier advice that you should start saving NOW.

When it comes to National Insurance, things have changed recently and instead of receiving four quarterly bills from HMRC there are now two payment dates per year instead of four. So if you set your business up in July this year then Class 2 contributions are due on 31st January 2013 and July 31st 2013, the same dates as Self Assessment tax.

My advice would be set up a monthly direct debit as soon as you can to stagger these costs. For detailed advice from HMRC, please click here.

So, this series is almost complete and I can go back to running my own business instead of telling you lot (through my mistakes) how to do it. So, on that note, let it be known there is no such thing as a free six-step series to running your own business.

So please contact me on Twitter if your company needs help on content strategy, I really am just what you need – ha-ha.

Monty (713 Posts)

Monty Munford has more than 15 years' experience in mobile, digital media, web and journalism. He is the founder of Mob76, a company that helps tech companies raise money and exit. He speaks regularly at global media events with a focus on Africa, writes a weekly column for The Telegraph, is a regular contributor to The Economist, Wired, Mashable and speaks regularly on the BBC World Service.