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Master checklist for new business owners

a woman is making notes of what needs to be done for starting a business in a cafe

When you took up the title of “business owner”, you simultaneously agreed to an annual set of financial and legal obligations.

We’re here to make them a breeze. So in addition to helping you prepare them each year, we’ve built a checklist to ensure your business is set up correctly.

Read on and learn what’s needed to keep the tax office happy – along with any employees or additional shareholders of yours. Below are the procedures you need to be on top of.*

* It could be a great idea to bookmark this.

Scroll on, or jump straight to a topic.

  • Choosing to be a sole trader or a company
  • Registering for VAT
  • Accounting software
  • Bank accounts
  • Insurance
  • Internet
  • Agreements
  • Income tax
  • Employing people
  • Figuring out if you need an accountant
  • Understanding the expenses you can claim
  • Common pitfalls for new business people

Choosing sole trader or a company

What’s your long-term plan? If you’re planning to stay small, it could be a good move to class yourself as a sole trader. However, there are real benefits to incorporating your business as a company if you have growth on the horizon.

If you’re not sure yet, you can get a better idea of the ideal choice for you with our article – Choosing Sole Trader vs Company.

And if you’ve already decided to register as a company, here’s where to do it and here’s where to grab a corporation tax UTR (it’s necessary by law). We can also handle the whole process for you – just get in touch.

Registering for VAT

Here’s how to figure out whether or not you should register your business for VAT.

Are you (or your business) earning (or expecting to earn) over £85,000 per annum?

Then you’re legally required to register for VAT.

You’ll need to register for VAT with HMRC and you will be issued a VAT registration number. You can register online here.

Are you earning under £85,000 per annum?

Then it’s your call if you’d like to register for VAT. It could be helpful if:

  • You’d like to claim back VAT on a large asset you’ve purchased and you’re fairly sure sales are going to be over £85,000 at some point
  • Most of your sales are to overseas entities – you won’t pay VAT on the overseas income, but you can claim VAT on the expenses you incur in the UK.

The key to understanding VAT is recognising what you can and can’t claim. Learn all about that in our dedicated article here.

As our client, we’ll offer you a full VAT service if you’re using Xero. We make sure you’re claiming all your permitted expenses.

Accounting software

You can’t trust a spreadsheet.*

Of all our recommendations, the strongest is that you use some form of accounting software. You can learn all about the benefits with this article of ours

We’re big advocates for our partner, Xero. They’re the best accounting software on the market in the UK, but there are other providers like Sage, QuickBooks and FreshBooks.

If you’re yet to choose a system, it may help your future-proofing to know we’re a Platinum Champion Partner of Xero’s and a certified Xero advisor.

Have a chat with our support team if you’d like to learn anything Xero (including integrations with your current systems). You can also do a 30-day free trial over on Xero’s website.

* The problem with relying on a spreadsheet is that a single mistake in your formulas at any point can cause catastrophic problems in future.

Bank accounts

It’s best to have two bank accounts. One handles normal trading transactions, while the other takes care of your tax savings.

We suggest transferring 30% of your sales into a separate bank account. This ensures you have adequate funds at hand when tax time rolls around!


The ideal combination of insurances for you will depend on your business and personal situations.

Here are some questions to consider:

  • Should your business assets be insured?
  • Do you need professional indemnity insurance?
  • Have you thought about personal loss of income insurance?
  • Do you need public liability insurance?
  • Do you need business interruption insurance?

Discussing your needs and risks with an insurance broker is a great idea.

It’s also worth knowing that most insurances can be tax-deducted for business purposes, although there are a few instances where they cannot.


Protecting your data is critical for you and your customers. You may need:

  • A firewall
  • Anti-virus software
  • Two-factor authentication
  • Separate emails for business and personal use
  • Strong password protection – including mandatory changes on a regular basis
  • Data backup
  • A Virtual Private Network (VPN)
  • Secure wi-fi connections
  • Tracking apps for mobile devices
  • Data encryption

Also have a think about:

  • Software you need
  • Creating a website
  • Creating social media accounts
  • Protecting your data (so important that it needs to be repeated)


Unless you already have a company constitution, it’s a good move to formalise agreements between shareholders or partners. Your agreements don’t need to be complex and can be written without legal support.

An agreement should detail:

  • Each person’s activities
  • How profit is shared
  • Funding arrangements
  • How disputes will be resolved
  • Any other terms and agreements between you worth documenting

We recommend asking your lawyer to take a look at anything you’re about to sign.

Income tax

If you’d like an in-depth intro to everything you need to know about income tax, go straight to our article, here.

You can do your future self a major favour by keeping your bookkeeping and accounting systems up to date. It equips your accountant to see how you’re tracking and let you know how much tax you should be putting aside.

To ensure you pay your annual tax bill without worry, we always recommend putting aside 30% of your sales in a separate bank account on an ongoing basis.

Employing people

Before employing staff, it’s important to understand that you have responsibilities as an employer.

  • You must have an employment contract signed before an employee starts
  • You need to know your workplace pension responsibilities
  • You must register as an employer with HMRC
  • It’s wise to purchase payroll software that calculates your employees’ wages
  • You must file PAYE returns with HMRC on or before every payday
  • You must pay PAYE and NIC to HMRC each month

We have more detailed information here, which gives you an idea of the ongoing requirements of being an employer.

If it’s only you working in the business, it’s a good move to keep yourself off the payroll for the first year. You’ll still pay tax, but later, and the amount will depend on your profit levels. We explain further here.

Figuring out if you need an accountant

Having an accountant by your side allows you to focus on growing your business, while they handle the numbers.

  • They take care of the tax balancing act – making sure you pay the right amount of tax that’s also the least amount of tax.
  • They preserve your energy for the productive parts of your business, while they handle compliance.

Got any questions about Beany?

Chat to one of our friendly team today to get clarity.

Understanding the expenses you can claim

It’s difficult to figure this out. Here’s why:

You can claim any expense directly linked to the production of your business income.

Distinguishing what’s directly linked is hard. Doctor’s bills aren’t linked – even though your work depends on you being healthy. Neither are your boat costs – even when you’ve taken clients out on it.

We have an in-depth article on figuring out which expenses you can claim, here. But keep in mind that as a Beany client, we’ll make sure you claim all of your legitimate expenses.

Common pitfalls for new business people

It wouldn’t be silly to make a calendar notification for three months from now to check this list again. Are you slipping into any of these habits?

  • Failing to use technology to make things easier
  • Holding back from working with others because you think nobody will understand the business
  • Not playing to your strengths and letting others handle your weaknesses
  • Being afraid to ask for help

How Beany can help?

We’re an online accounting firm that is always right here for you, your accounting pain relief. The most advanced technology lets us work way more closely with you than a normal accountant would. 

We have a dedicated team of remote accountants to take care of your business no matter where you are, so you can focus on growing your business. We take out the ‘fluff’, break down the barriers and get things done. Looking out for you is what we are all about. Get started for free today.


Charlotte Wass

General Manager, Beany UK

Chartered Accountant and Chartered Tax Adviser based in London. I love autumn, otters and Malteasers, and I hate spiders, peanut butter and the London Underground.

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