Jeff Gitter, a partner with Lubbock Fine, a City firm that specialises in advising small businesses, said it was difficult for people to set up in business and that they should observe some 'essential financial do's and don'ts'.
If you expect to generate a new source of income, you should notify the Inland Revenue in the correct way immediately, or face a penalty.
Assess whether the amount of income to be generated requires registration for VAT. If you think income could reach pounds 37,600, you must register.
Budget carefully for VAT and tax and be realistic about cash- flow forecasts.
Keep accurate records of all transactions to help to keep down accountancy fees and avoid the risk of supplying the wrong information.
Investigate whether you need to be a sole trader, partnership or limited company.
If you need to raise finance from a bank or other source, your chances will be greatly improved by having a well-prepared business plan and cash- flow forecast.
Ensure that national insurance contributions are paid correctly.
Decide whether to work from home or take separate premises.
Consider the need for employees and a payroll facility.
Look at printed stationery requirements.
Mr Gitter said: 'We believe that there are many income opportunities out there, but that plenty of capable people may be put off by the thought of the administrative burden of books, tax, VAT, accounts - and accountants.'Reuse content