We will help get your business officially incorporated

Company formation

A 12-month plan designed for new business owners who may want some extra guidance around business structure, accounting software setup and training, and more.

We will provide you with guidance and support on what you'll need to do to establish and commence running your new business

We can provide advice on the best business structure for your needs and take care of establishment and registrations

Set up your Xero file so it's optimised for you and give you initial training so you start off in the right way

Preparation of a budget tailored to your business and input into Xero so you can track how you're going

Starter Pack

Designed for sole trader businesses, we'll do your bank reconciling so you can relax knowing it's done right, and on time. Take one less task off your plate.

Bank reconciliation - sole trader businesses

A 12 month plan designed for established businesses. Additional support in the form of management accounts and time with your accountant

Completing quarterly management accounts tailored to your business requirements and aligned to your VAT quarters

Quarterly meetings with your accountant to chat business planning, strategy, or questions about your management accounts

Success pack

Designed for non-VAT registered businesses, we'll do your bank reconciling so you can relax knowing it's done right, and on time.

Bank reconciliation - non-VAT registered companies

The initial setup of your Xero accounting software tailored to your business's needs, plus a one hour training session where you'll learn the best practices for bookkeeping and financial tracking.

Xero setup & training

We prepare your quarterly VAT returns ready for you to review and pay.

Prepare VAT

Starting a limited company? Understand the key differences between company limited by shares and company limited by guarantee, choose the best structure for your needs.

FINANCIAL LITERACY  •  12 NOVEMBER 2024  •  4 MIN READ

What’s a Company Limited by Shares vs a Company Limited by Guarantee?

Choosing the right company structure is a crucial first step, and choosing between different company structures can feel overwhelming. Two popular choices are a ‘company limited by shares’ and a ‘company limited by guarantee’. Whilst both offer limited liability, they cater to different needs and goals. 

In this guide, we’ll explain the differences between 2 types of limited companies, covering definitions, key advantages, and frequently asked questions, empowering you to make the best choice for your company.

Companies limited by shares is one of the most common types of limited company in the UK. Simply put, the liability of its shareholders is limited to the amount of money they’ve invested in the company by purchasing shares. This means if the company is in debt or faces financial difficulties, the shareholders’ assets are protected and won’t be used to pay off the debts.

There are several key advantages of structuring your limited company by shares, these are:

Limited liability - the company is a separate legal entity from you, which means you’re not liable for the company’s debts. 

Growth potential - it’s easier to get investment because investors are more attracted to this company structure - it limits investors’ liability and allows them to either sell or buy more shares.

A company limited by guarantee is another type of limited company, it’s commonly used for non-profit organisations, charities, and community interest groups. Instead of having shareholders and share capital, a company limited by guarantee has members who provide a guarantee to contribute a specified amount in the event of the company's liquidation. 

Companies limited by guarantee are all about doing good, not making a profit. They can't pay profits to their members – any extra cash they make has to go back into the company to help it achieve its goals. 

Limited liability - the company is a separate legal entity from you, which means you’re not liable for the company’s debts. The members' liability is limited to the amount they agree to contribute in the event of the company being wound up. 

Perfect for non-profits - this structure indicates that the company is not driven by profit, which can build trust with donors and the public.

Democratic structure - members typically have voting rights, giving them a say in how the organisation is run. 

To make it easy to understand, we’ve outlined the key differences between companies limited by shares and companies limited by guarantee: 

1. Can a company convert from a company limited by shares to a company limited by guarantee, or vice versa?

No, it’s not possible to change your company type, but you can deregister your existing company and register a new company and transfer the assets and liabilities across. It’s crucial to seek professional advice to ensure the process is legally compliant. It’s also important to discuss the company structure with your accountant before setting up a limited company to avoid the hassle of switching down the road. 

2. How does the company structure affect my liability?

With the company structure, there is a legal separation between you and your business. For companies limited by shares, you’re not personally liable for your business’s debt; for companies limited by guarantee, you might have to contribute a small amount (the guarantee amount) if your business folds, but your personal assets are otherwise safe.

To set up a limited company, follow this step-by-step guide on GOV.UK. Or you save your time and ensure it’s done correctly by engaging an accountant, such as Beany. Book a chat with one of our team members to discuss your situation., It’s important to note that there are some key considerations before setting up a limited company, we have an in-depth guide on the top 9 things to think about when setting up a limited company.

4. What are my tax obligations if I have a limited company?

No matter if you have a company limited by shares or by guarantee, your tax obligations are largely the same. Some key tax obligations are: corporation tax, VAT (if you’re VAT-registered), and PAYE. We have an in-depth blog on limited company taxes if you’re interested to learn more.

Both companies limited by shares and by guarantee have reporting requirements, these are:

Confirmation statement, it must be filed with the Companies House every year

Financial statements, again filed annually with Companies House

Tax returns - the company will be required to submit a corporation tax return. Directors or shareholders may also be required to file an income tax return. Read more on corporation tax.

If your company is VAT registered you will also need to file VAT returns and pay your VAT liability, usually quarterly

If your company runs a payroll you will also need to fulfill your PAYE reporting requirements.

Maintaining a share register (if your company structure is limited by shares) or register of members (if your company structure is limited by guarantee)

6. How do I close down a limited company?

To close a limited company in the UK, you'll need to cease trading, settle all debts and taxes, gain shareholder approval (if applicable), and apply to Companies House for "striking off" the register. This process can take several months, and we recommend you talk to your accountant to ensure you’re compliant. If your company is insolvent, you can consider alternative procedures like liquidation.

Ditch the stress of limited company compliance. Beany makes it easy, handling everything from corporation tax to VAT returns. You’ll get a team of experts helping you stay compliant, so you can focus on growing your business. Visit our website, book a call with one of our team members or register today.

Beany Resources delivered straight to your inbox.

What’s a company limited by shares vs a company limited by guarantee?

Financial literacy

On 30 October, the 2024 Autumn budget was unveiled. We've provided a handy overview of the most important changes for small business owners.

INDUSTRY NEWS  •  01 NOVEMBER 2024  •  4 MIN READ

Learn how the UK Autumn Budget 2024 impacts you and your small business - tax, wages, allowance updates, and more.

Key highlights for small businesses from the UK's autumn budget 2024

On 30 October 2024, Chancellor Rachel Reeves unveiled the UK's Autumn Budget, bringing significant updates that affect individuals and businesses across the UK. 

There’s been a lot to unpack from the budget, so below we’ve provided a handy overview of the most important changes for small business owners, focusing on tax, wages and allowances. Below we highlight the key changes that will impact the financial landscape for small business owners and their teams.

Employer’s National Insurance and Allowance

One of the most impactful announcements from the budget was around employer’s national insurance. From April 2025, employer National Insurance contributions (NICs) will rise by 1.2%, bringing the rate to 15%. Additionally, the income threshold at which employer NICs apply will drop from £9,100 to £5,000. This dual adjustment increases NIC costs for employers and, small business owners will need to prepare for these cost hikes as they budget for their teams.

It’s not all bad news, however, in response to calls from the small business community, the Employment Allowance will more than double from £5,000 to £10,500 starting in April 2025. This increase provides significant National Insurance savings for smaller businesses. With the updated allowance, a small firm could employ up to four individuals on the National Living Wage without paying any NICs. 

The government also removed the NICs cap, meaning that businesses of all sizes can now access this allowance. For the smallest employers, this relief effectively shields them from the NIC increase.

Remember, that companies where the only employee earning above the secondary threshold is a company director will continue to not be eligible for the employment allowance.

In a move aimed at balancing fiscal responsibility with economic sensitivity, personal tax thresholds for income tax and NICs will be indexed to inflation beginning in 2028. This will be the first change since thresholds were frozen in April 2021.

The National Living Wage for workers over 21 is set to rise by 6.7%, reaching £12.21 per hour in April 2025. This increase provides a considerable boost to employees, translating to an extra £1,400 annually for a full-time employee. Employers should plan to accommodate this increase in payroll costs, which will be an added consideration alongside NIC changes.

Business rates relief for SMEs in retail, hospitality, and leisure sectors will continue at 40% until 2026, though this represents a reduction from the previous 75% relief. From 2026 onwards, a new structure of permanently lower business rates will be introduced, aimed at stabilising this cost for SMEs in the long term. This relief remains capped at £110,000.

For broader CGT changes, the higher rate will rise from 20% to 24%, and the lower rate from 10% to 18%. Capital gains tax on residential property remains the same.

Changes to Business Asset Disposal Relief (Entrepreneurs’ Relief)

Business Asset Disposal Relief (formerly Entrepreneurs’ Relief) will continue to provide discounted Capital Gains Tax (CGT) for those selling a business, though at slightly increased (and therefore less beneficial) rate. The rate will move from 10% to 14% in April 2025 and up to 18% in 2026. For entrepreneurs relying on this relief as part of their retirement planning, the change brings some additional tax burden but preserves the relief’s value for the foreseeable future.

Corporation Tax, R&D Relief, and Annual Investment Allowance

Encouraging investment in growth, the Annual Investment Allowance remains at £1 million, and R&D tax reliefs stay at their current levels, providing ongoing support for business reinvestment and innovation. The Small Profits Rate for Corporation Tax is also retained, which is especially beneficial for smaller firms looking to manage their taxable profits.

Read more: Understanding the basics of Corporation Tax

Inheritance Tax Adjustments for Business Assets

Effective April 2027, pensions will fall within the scope of inheritance tax (IHT) calculations, impacting long-term estate planning. Additionally, Business Property Relief and Agricultural Relief will only apply to the first £1 million of combined assets, leaving higher-value businesses and farms with some potential IHT exposure. Small businesses and farms with significant asset values should assess their succession plans to mitigate potential IHT liabilities.

The budget keeps fuel duty frozen, with a 5p cut extended for another year, a relief for transport-reliant businesses. Meanwhile, alcohol duty will increase by the RPI rate of inflation, except for a 1.7% cut on draught drinks, benefiting hospitality businesses.

The Autumn Budget 2024 reflects a balanced approach, offering relief to small businesses while setting out fiscal measures to support broader economic stability. With changes in National Insurance, wages, and tax thresholds, small businesses will see both cost increases and areas of support.

For more specific guidance tailored to your business, feel free to reach out to us here at Beany. 

Need a helping hand? At Beany, we specialise in making accounting and tax a breeze. Our team of experts can handle your tax compliance so you can focus on what you do best – running your business. Let Beany be your trusted accounting partner. Get in touch with us or book a call to discuss your accounting requirements.

Key takeaways from the Autumn Budget 2024 for Small Business Owners

Industry news

Discover how Polymodels Hub capitalised on an opportunity in the pharmaceutical tech space and how Beany's support helped the business thrive. 

CUSTOMER STORY  •  30 OCTOBER 2024  •  5 MIN READ

Polymodels hub - accelerating drug development with modelling, simulation, data and the accounting support of Beany

Meet Antonio Benedetti, Co-Founder of Polymodels Hub

Drawing on past experience, Polymodels Hub is capitalising on an opportunity to accelerate the development of new drugs and deliver them to patients faster.

“We are a venture-backed business that supports pharmaceutical companies with digital tools in the development of new molecules and products.” Antonio explains, “We work on the development side of things. How to bring a drug from the lab to the manufacturing facilities and how to do that in a digital manner.”

With three co-founders developing expertise in differing scientific domains, Antonio believes their business provides a unique mix of product and service for the industry.

“Two of us worked together at a large pharmaceutical organisation, so we explored firsthand the actual pain and benefit of trying to implement some of these solutions, and where there was a bit of a gap, particularly from the product standpoint, but also positioning in terms of types of services offered. We’ve seen the big opportunity and return on investment that this type of tool brings to the actual pharmaceutical organisations and that gave us the confidence that we could scale across the industry in a similar manner. Our third co-founder has expertise in the product side of things, so in order to build our product it was a good move to add an additional person that could bring that.”

In a journey that’s spanned less than nine months of full-time operation, they are already making exceptional leaps beyond their initial starting plans and vision.

Antonio expresses his excitement: “I’m happy about the type of partnerships we’ve already established. Getting to work with three of the top 10 is priceless for a start-up and it’s very exciting. Being able to grow the team from day one and create a team of fantastic individuals has been another key success. Every time a new team member starts with the right attitude and skill set it feels like a win.”

Amongst their wins so far is also getting a seed round of investment.

As a small start-up, Polymodels Hub’s biggest challenge is trying to get into large pharmaceutical companies.

“You need to have the right type of conversations with the right people to convince these businesses you can effectively provide more value than other companies out there.” Antonio admits.

Although being a challenge, it’s one that they also consider a win when they can celebrate the success of obtaining a new client.

“I would say it’s really about showcasing what kind of value we can bring to the table to this large organisation, and showing we are solid enough to give them the confidence to partner with us for the years to come. It’s a nice challenge to have and we’re up for it, and I think so far it’s materialising well.”

Antonio shares the role Beany has played in helping with the start-up journey so far.

“I’ll be fully honest, it has been a fantastic experience so far.” he says. “Finding a good lawyer and accountant was the first tip I got when digging deeper into how to set up a company.”

Speaking of the partnership that’s developed, he shares “I’ve been lucky that with Beany we’ve found a perfect partner from an accountant standpoint to really satisfy the type of needs that we have as a small business. In my case, it was also coming from abroad even though I’ve lived here for a few years. I wasn’t really familiar with the accounting rules and good practices in this country and Beany was the perfect partner to navigate me through that and provide the support I needed.”

Having professional support has helped Antonio and his co-founders be able to focus on the business and what they’re trying to achieve.

“I think it’s extremely important. It's important not to cut costs when it comes to legal or accounting services. Most importantly, you need to find the right people. It’s easy to spend it but if the service is not good it’s not really going to work in the end. With Beany I was really impressed by the quality of the service and the efficient response that we also always get whenever there is a problem or a question or an issue that we need to face.”

Reflecting on his journey so far, Antonio emphasises the value of patience, knowing your vision and the people. 

“One key thing is you need to be patient for things to materialise. The second is that you need to keep strong on the vision and the strategy that you put together. I think another thing I’ve learned is to invest as much as possible in people. This is something I had the chance to explore when I was in previous roles, but with a start-up, it’s even more important. At the end of the day we are a group of people working towards a vision and a goal, so it’s crucial to find the right people to start the journey. So far it’s been great.”

When asked for advice for other business owners, Antonio gave us the following two gems:

Speak as much as possible with other founders and understand some of the challenges they face. Try to find common ground that you know may save you quite a bit of time and money.

Don’t get too distracted by all the advice out there, just try to find what works for the company you’re trying to build. There are playbooks and those are important, but everyone needs to find their own way of doing things and their own approach to business. That ultimately helps the product but also the culture of any company.

For Antonio and the team the next step is to expand as much as possible. “We want to expand the type and number of customers we have, and also try to push a lot on the product. I think the objective for next year is to start to deploy the product at scale, reach a wide number of companies and try to really shape it in the best way possible.”

With a strong belief in the importance of team, Antonio shares with us the potential to also grow in that space and create an impact that’s more than just business.

“We’re expanding the team and looking forward to seeing what else we could build on top of what has already been achieved to really create value for the companies first, but most importantly the patients.” he shares. “The ultimate goal is to reduce the timelines for the development of drugs and bring medicine to patients faster, so that’s really what creates impact. And not just a business impact, but an impact for society.”

We can’t wait to see the difference Polymodels Hubs will continue to make with their technology and the lasting impact on the acceleration of drug development and the overall healthcare industry.

You can find Polymodels Hub at https://www.polymodelshub.com/

As a business owner, we know you value your time. That’s why we designed the simplest and most pain-free online accounting service around. Our team of experts handle the number crunching, so you can focus on what you do best - starting and growing your startup. From filing year-end tax returns to bookkeeping and VAT, we're here to support you every step of the way.  Ready to simplify and unlock your business's potential? Visit our website, sign up, or book a call today!

Customer story

If you find yourself wanting more from your current accountant, it may be time to switch. We provide some guidance on how to make the transition.

FINANCIAL LITERACY  •  29 OCTOBER 2024  •  3 MIN READ

If you find yourself wanting more from your current accountant, it may be time to switch. We provide some guidance on how to make the transition smooth.

How to handle transitioning from your previous accountant

Is it such a stretch to expect excellent service from your accountant? We don’t think so! 

If you’ve been finding yourself constantly nudging your accountant for responses, deciphering vague replies, or feeling like your business is just another file on their desk, it could be time to raise the bar. Why? 
Because it’s crucial to have an accountant who not only understands your present needs but also strategically prepares for your future. After all, an effective accountant is one who values your time as much as you do, offering swift, clear, consistent support tailored to your business needs.

Assess your current situation and identify what’s lacking with your current accountant. Is it about responsiveness, expertise, or something else?

Look for accountants who resonate with your business ethos, and prioritise those with a strong understanding of modern business dynamics.  

Set up meetings and don't be shy to reach out to discuss your business needs. It's your chance to lay out exactly what your business requires in terms of accounting services. 

Be specific and candid about your needs, whether it's detailed financial reporting, strategic tax planning, diligent bookkeeping, or expertise in certain industry areas. Inquire about their experience with small businesses and how well they understand the tax nuances in your specific region. For businesses operating in the UK, it's crucial to choose an accountant who has a deep understanding of both areas to ensure seamless financial management.

Compare what’s on offer from potential accountants, looking beyond just the fees. Consider the overall value and personalised service you'll receive. In your search, keep an eye out for options like Beany's monthly accountancy package. Our transparent, fixed monthly pricing not only helps you budget effectively but also ensures you stay on top of your administrative needs without any surprises.

Inform your current accountant politely that you’re switching. It's not just courtesy; it's good business karma. If you maintain professionalism and provide adequate notice to ensure a smooth transition, you should avoid any potential friction. And don’t forget to request copies of your financial records, tax returns, and other relevant documents! (Some accountants will handle this process for you so you don't even have to do it yourself).

Work with your new accountant to transfer files and information. Make sure to grant your new accountant access to all the essential documents, and prioritise the secure handling of sensitive information during this transition. If you’re not already set up with accounting software (like Xero), your accountant should be able to help. At Beany, we offer a range of Xero services including Xero setup and training.

Settle up with your old accountant and grant them permission to pass on the relevant information to your new accountant.

Establish your communication expectations. Regular chats and updates with your new accountant can do wonders for your business health. If you’re seeking further support or clarity around switching your accountant, please contact our team.

Not at all. With the right approach and guidance, it's very straightforward and can be instrumental for improving your business.

Absolutely. There's no 'wrong' time to make a change that benefits your business.

What if I've prepaid my current accountant?

No worries, you can still make the move. Any prepaid fees can often be adjusted or refunded (depending on work they've completed and their client terms and conditions).

At Beany, we're 100% committed to your success. Our core package covers your year-end compliance, with one fixed cost split over 12 months. This includes your end-of-year accounts and tax returns, tax minimisation, unlimited support and more. We also have a wide range of other helpful services to help you as you start out or as you grow, such as bookkeeping, VAT returns, payroll and more. Book a call for a free chat about your accounting requirements - we'd love to help.

You may want to show your appreciation by giving employees or clients gifts during the festive season. However, here are some employee benefits and tax rules you need to follow. 

EXPENSES  •  25 OCTOBER 2024  •  3 MIN READ

You may want to show your appreciation by giving employees or clients gifts during the festive season. However, there are some employee benefits and tax rules you need to follow.

Understanding employee benefits & tax: can I make a gift to employees and clients?

You may want to show your appreciation by giving employees or clients gifts during the festive season. However, here are some tax rules you need to be aware of. 

Trivial benefits include small gifts to employees, for example for Christmas or their birthday, that cost less than £50 (including VAT and delivery). 

Trivial benefits are tax deductible (for corporation tax if you’re a company or income tax if you’re a sole trader) and they have no National Insurance or PAYE implications.

An example might include chocolates, flowers or a bottle of wine. 

If gifts exceed £50 then they will need to be reported on the employee’s P11D and income tax and National Insurance contributions will be payable. 

If a gift costs more than £50 then the full cost would be treated as a taxable benefit. For example if you gave a gift worth £75 the £50 is not an allowance meaning only £25 would be taxable, the full £75 is the taxable benefit. 

If you're interested to know more, HMRC has a detailed guideline on tax on trivial benefits.

Christmas vouchers or cash bonuses to employees

Any gifts in the form of cash are treated as earnings, meaning they need to be processed through payroll and income tax and national insurance contributions paid.

If vouchers are given then they would be treated the same way as cash if the vouchers can be exchanged for cash. If vouchers cannot be exchanged for cash and are under £50 they are trivial benefits (see above). 

If non-cash vouchers exceed £50 they are treated as taxable and need to be reported on the P11D and the relevant income tax and NIC liabilities paid. 

Employees receiving gifts from third parties (ie your clients)

If your employees receive benefits from third parties as a result of their employment there is no taxable benefit as long as the cost of the gift does not exceed £250. 

Christmas gifts to anyone other than employees is likely to be treated as entertainment and therefore not a tax deductible expense. 

If a business gives away its own goods and services (which it ordinarily trades in) to the general public either free of charge or for a subsidised payment as a method of advertising then it is treated as deductible. In order to be treated as advertising the items need to contain your own company’s branding or logo, for example branded pens or stationary, or be a product that your company usually produces. 

However, if a Christmas hamper is gifted to clients then this would be treated as entertaining and is not tax deductible. 

Read more: A guide to entertainment expenses

Staff entertainment is allowable, unless it is incidental to the cost of entertaining customers. 

If an employer puts on a Christmas party for the benefit of their employees only, with the intention of motivating staff and boosting morale, then this is deemed to be expenditure incurred in the ordinary course of the trade and is tax deductible. 

If, in contrast, you put on a party for customers to thank them for their custom over the year and staff were also invited to attend and to serve food and drinks, this would not be treated as tax deductible. 

In order to avoid a staff Christmas party being treated as a taxable employee benefit, the event must be an annual function (such as a Christmas party), be provided to all employees and the cost cannot exceed £150 per head.  

If the cost of the event exceeds £150 per head it is still tax deductible for corporation tax or income tax purposes, but PAYE and NIC will be chargeable on the full cost of the event. 

Since it is often difficult to assign the cost of putting on an event to individual employees, employers often choose to pay for the PAYE and NIC obligations that are usable payable by the employees via a PAYE Settlement Agreement (PSA) which means the employer instead meets these liabilities. 

If you put on a party for the enjoyment of both staff and customers you will need to work out the proportion of costs that relate to customer entertainment and the proportion that relates to employee entertainment. For example if you went to a hotel for a dinner (ie your employees weren’t serving your clients) and attendance was 50% employees and 50% customers, then 50% of the cost would be tax deductible and 50% would be disallowed. 

VAT can’t be claimed on non-deductible entertainment expenses. 

The general rule is that VAT incurred on goods and services used for a business purpose can be recovered as input tax. However, if this input tax is incurred by you on the provision of business entertainment to UK business contacts and non-UK business contacts who are not customers it cannot be recovered. 

The input VAT incurred on employee entertainment can be reclaimed, since it is incurred wholly for business purposes, except in the following two cases:

Entertainment provided to directors, partners or sole proprietors only (this does not include where partners and directors attend staff parties along with other employees)

Where employees act as hosts to non-employees

Resources: 10 common VAT mistakes small business owners should avoid

Need a helping hand? At Beany, we specialise in making accounting and tax a breeze. Our team of experts can handle your tax compliance so you can focus on what you do best – running your business. Let Beany be your trusted accounting partner. Get in touch with us or register today.

Expenses

Set your startup for success with these 7 accounting tips - from choosing the best business structure to the importance of getting an accountant for your startup.

NEW BUSINESS  •  24 OCTOBER 2024  •  5 MIN READ

7 Accounting Tips Every Startup Needs to Know

Launching a startup in the UK is exciting, but accounting in startups can feel like a maze navigating blindfolded. Don't worry, we've got you covered! In this blog, we'll break down everything you need to know, from choosing the best business structure to why you need an accountant for your startup from the get-go. 

1. Choose the best business structure for you

Choosing the right business structure for your startup is a crucial first step. It impacts your tax obligations such as how much tax you’ll pay and when to pay them, as well as your ability to raise funding. 

There are 3 common types of business structures in the UK: sole trader, company, and partnership.

Operating as a sole trader might be the easiest and simplest, but leaves you personally liable for business debts. This means if your business incurs debt, you’ll have to use your personal assets to pay off the debt. If you run your business as a company, it offers some personal liability protection, however, it comes with more complex regulations and tax requirements. 

The ‘best’ structure depends on your specific circumstances, risk tolerance, and long-term goals. That’s when a startup accountant steps in. Don't hesitate to consult with them to determine which business structure suits you best. It’s important to note your needs may change as your business grows and evolves, so it's crucial to re-evaluate your structure periodically (maybe at the beginning of the new financial year). 

Read more: Sole trader vs private limited company business structures

Don’t underestimate the power of accounting in startups. Having a good accounting system is the sturdy backbone that supports your startup's growth. While spreadsheets might seem sufficient in the early days, investing in a proper accounting system from the start can save you countless headaches down the line. Accounting systems such as Xero or Quickbooks can effortlessly track your income and expenses, generate insightful reports with a click of a button, and even help you manage your cash flow like a pro. This isn't just about crunching numbers; it's about gaining valuable financial insights that empower you to make informed decisions.

Having a separate business bank account is more than a good practice; it’s building a solid foundation for your startup’s financial house. A separate business bank account draws a clear distinction between your personal and business finances. You don’t need to do any more scrambling to figure out if that coffee was a business expense or just a Monday morning necessity. This makes tracking your income and expenses a breeze when the tax season comes around. 

Moreover, a separate bank account provides a clearer picture of your startup’s financial health. You can see exactly how much money is coming in, where it's going, and spot any spending trends. This is super helpful for making smart decisions about your business, like whether to hire that extra hand or invest in that shiny new equipment. Plus, it shows investors and clients that you're on top of your game and taking things seriously.

4. Consider registering for VAT from the start

Now, you might not have to register right away, especially if you're starting small. But if you're ambitious and expect to hit that £90,000 turnover mark within your first year, registering for VAT from the get-go can be beneficial in some instances.

Think of it this way: registering early means you're already set up to handle VAT, no scrambling to catch up when you hit that magic number. Plus, you can claim back VAT on those early expenses. Every penny counts when you're just starting out!

However, registering for VAT also means taking on extra responsibilities, like filing those returns on time. 

When your customers are individuals rather than VAT-registered businesses, it's important to remember that the cost of your products or services will increase for them after you register for VAT. Since they won’t be able to reclaim the VAT, this added cost will be passed on to them directly.

If you're feeling a bit overwhelmed, have a chat with your accountant. They can help you figure out if early registration is the right move for your unique situation.

A well-defined business plan and a meticulously crafted budget are essential for startups to navigate the path to success. 

A business plan articulates the startup's vision, value proposition, target market, and competitive landscape. It outlines the strategies that will be employed to achieve short-term and long-term goals, providing a roadmap for growth and sustainability. A budget, on the other hand, provides a financial framework for the startup's operations. It forecasts revenue streams, anticipates expenses, and facilitates informed decision-making regarding investments, resource allocation, and financial management.

A strong business plan and a realistic budget are essential for any startup - they act as a roadmap and financial compass, guiding your journey towards success. If you’re not sure how to create a business plan or a budget, always consult your accountant. If you’re not working with one, book a call with one of the team members or sign up for Beany. 

Most of the time, even the most groundbreaking ideas need a little financial boost to truly take flight. That's where startup business grants come in - helping startups to turn their dreams into realities. They can provide the crucial funding needed to overcome those initial hurdles, whether it's developing a prototype, securing essential equipment, or launching a marketing campaign. 

Don't be shy about seeking out these opportunities. Research various grant programs, tailor your applications to highlight your unique strengths, and craft a compelling narrative that showcases your vision. Treat each application as a chance to refine your business plan and articulate your goals with clarity and passion. Even if you face a few rejections along the way, remember that persistence is key. 

There are a few places where you can find startup grants:

Finance and support for your business on GOV.UK

7. Getting an accountant for your startup

While you might be tempted to wear all the hats yourself, especially in the early days, seeking professional help from an accountant can be a game-changer. They can help you set up a robust accounting system, ensure you're compliant with all tax obligations, and provide valuable insights into your financial performance. Imagine having a trusted startup accountant who can help you make sense of the numbers, identify potential pitfalls, and unlock opportunities for growth.

Beyond technical expertise, a good accountant can be a valuable sounding board for your business decisions. They can offer objective advice on everything from managing cash flow to securing funding. It's like having a financial mentor in your corner, cheering you on while keeping you on track. Working with an accountant is an investment in your startup's long-term success. 

If you’d like to know more about how Beany works with your startups, book a call with one of our team members. 

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