The study of over 2000 people by Standard Life found some of the biggest barriers to starting up were not knowing where to begin (10 per cent) and a lack of confidence (10 per cent).
Chris Moore, who runs TaxAssist Accountants with wife Eira in Telford said: “While setting up your own business can be a daunting prospect, it can be extremely rewarding, offering more flexible working and the potential to be more tax efficient. However, with the move to quarterly reporting to HMRC on the horizon, if you’re seriously considering making the leap, it’s vital to produce a clear business plan, cashflow forecast and keep records in order.”
Under current rules, fledgling businesses can put off tax payments for up to 21 months in their crucial start-up phase. Announced in the Chancellor’s budget in December, HMRC is currently in consultation to move to digital accounts, meaning all businesses would need to report and pay their tax quarterly.
Chris Moore added: “Entrepreneurs should also consider the cost efficiencies of setting up from home rather than going straight into premises. There are currently more than 2.9 million home-based businesses in the UK which, as well as saving on transportation and premises costs, can benefit from offsetting a share of some household bills to reduce the tax you pay. This can include mortgage interest, insurance, rent, utility costs and rates as well as a percentage of phone line rental, internet and the cost of business calls.”