Part one: Record keeping & Bookkeeping
Part two: Credit, VAT & National Insurance
Part three: PAYE & Credit Control
PAYE & National Insurance
Running your own business does mean you have a responsibility to not only pay taxes but also collect it on behalf of the government. Aside from VAT this takes the form of tax and National Insurance payments on behalf of any employees you may have.
If you employ people, you have a responsibility to deduct income tax and national insurance from all payments to employees. If you do take on employees you must inform H M Revenue & Customs immediately and they will send you a pack containing all the information you need along with calculations on how much tax and national insurance to deduct. As will all other tax payments there are time limits that must be adhered to or penalties will be charged.
Credit
Many businesses rely on credit control to run their business. When starting up your business you need to decide what credit you are going to give your customers, what your payment terms are and how you will manage chasing debts.
You can check other companies credit ratings online and it can cost as little as £50 - it is always worth asking your customers for trading references so you can check their trading history. By spending time doing your research, you will minimise the chances of dealing with bad debtors who could ruin your business.
