Setting up an online store
The e commerce market is currently experiencing a boom all over the world. UK`s e commerce market is one of the biggest markets in Europe and it is still growing.
Many small start-ups are emerging to capitalise the huge opportunity created by Covid-19 in the online market place.
If you are one of those who want to start your own business you will have to analyse the market trends and come up with a product which you want to sell.
Once you have established a business plan you will have to choose a business structure for your business. You can chose among 3 types of business structures: you can either run your business through a limited company, sole trader or a partnership. Each structure has its own different sets of legal obligations. To read more about the legal obligations when running a limited company click on the link here.
In the following blog we will discuss the steps that you should take if you want to start your online business as a company.
STEP 1:
Register your business with the Companies house.
You should think about your business name and the things you will be selling before you register for your business. You will get a certificate of incorporation. Keep that document safe. It confirms the company number and the date of formation. You will have to create the government gateway ID when you will register you company. In case you don't want to have limited at the end of your company name you will have to register via post.
STEP 2:
Register your company for corporation tax.
You can do this at the same time you are registering for your company, however, you have 3 months after you start your business to register for corporation tax. If you wait for longer than 3 months to register for the corporation tax you might have to bear penalties.
STEP 3:
If you plan to hire employee and they will be earning £120 per week you should register for PAYE. As an employer you will have to report their salary and deduct tax and National Insurance for your employees. You might want to hire an accountant who can take care of running your payroll.
STEP 4:
You might also have to register for VAT if you expect that your taxable supplies will be more than £ 85 000 by the end of the month in which you started your business. You might also want to register voluntarily for VAT and send VAT returns every quarter from the effective date of registration.
STEP 5:
Before you start selling online you need to get a domain name. You can go this through many e commerce platforms such as Go daddy or Shopify.
You can connect yourself with an e commerce platform such as amazon and Shopify. Through Shopify you can get a domain name, host a website and sell through it.
Remember that you when you are selling online you will access to the international market. You will have to follow rules for international trading for example there are different VAT rules when you are distance selling. You might want to consider hiring an accountant to sort out your taxes and do your book keeping as accurately as possible so you don't have to bear any penalties.
If you are one of the start-up businesses and you need an e commerce accountants in Croydon do not hesitate to contact Taxaccolega at 020 8127 0728 or drop us a message here. Our expert team can help you set up a company and advise you on matters related to accounting and taxation of your company.
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