The predominant aim when running your own business is to ensure that you are doing enough work to make a profit.
You need to pay for your overheads, members of staff and all the other expenses involved, yet cannot expect to grow until a sufficient level of profit is being made.
So, what you wouldn’t want is to be hit with any unexpected costs, such as fines or legal bills, because you haven’t conducted your business in the correct way.
For the purpose of this piece we are going to look at the following three areas:
- Land planning
- Employment law
Here’s why you need to adhere to the rules to avoid making the running of a business even more costly than it needs to be.
Paying your taxes on time and in full
A business needs to ensure that it is paying Her Majesty’s Revenue and Customs the correct amount of tax and VAT out of the profits made. The amount of tax you pay will depend on how much has been made over the course of the tax year, which runs from April to March. Tax returns need to be paid for the previous year every January 31st – if the tax return isn’t completed, and you haven’t been in contact with HRMC to discuss the reason why you aren’t able to get it to them, it’s likely that you will incur a fine. These can be surprisingly hefty (you can see the fees on the HMRC website) – submitting your details just one day late can cost you £100, whilst being 6 months late may cost you up to 5% of the overall tax amount due.
If you are unconfident when it comes to completing your tax return, it’s best to seek the assistance of a professional accountant who will go through your books with a fine tooth-comb to ensure you are paying the correct amount!
This is another issue with many businesses who are looking to expand, or build their own office space in a convenient location. Virtually all major structural changes to buildings or the land need to go through a formal planning procedure – the local council where your business or office is located will need to be contacted to deal with this.
Things that could affect whether you would be able to build an office, or even something like an extension for example, could include whether the buildings around it have listed status, whether there would be strong public opposition, or if perhaps you were planning to build on an ecological habitat. Failure to get the relevant permissions could result in hefty fines, so always go through to correct procedures, no matter how long it takes.
It’s important to be clued up when it comes to employment law if you are planning to bring in members of staff to work for you. Employees are well protected when it comes to issues such as discrimination in the workplace, health and safety laws covered by Health and Safety Executive (www.hse.gov.uk) and things such as statutory sick pay and the minimum amount of holiday days they are allowed.
To avoid ending up in a tribunal, it is well worth your while getting in contact with a qualified legal advisor to help you, not only in the initial stages of setting up your business, but also to keep at close hand for if the time arises where you could do with their advice.
If you have any thoughts on avoiding unexpected fines in your business then please share what you can in the comments below.
- Have you ever been fined for a late tax return?
- How much do you know about employment law?
- Have you used a qualified business adviser?
- Do you know the correct procedures for building works/extensions?
- Do you have any tips to add to these three?
- Do you employ an accountant to go through your business books?
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