1. + Year 10 Start-up, Legal and Tax issues

2. + Lesson Objectives Understand the need to establish a unique trading trading business name. Understand the importance for a new business to keep careful records. Appreciate the implications for a small business and business start up of VAT, income tax, NI and Corporation Tax.

3. + Importance of a Business Name Important considerations: The name has to be unique and cannot be the same as any other business. The name has to promote your business You cannot use the names such as ‘Tesco or Marks and Spencer’s’. The Companies House (Government Organisation) will check your company name against any others in the local area and give you permission to set up your company.

4. + Importance of a Business Name The business name of your company also must reflect the type of business you are a running Normal business names could come from: Related to a persons name (Marks and Spencer's) Related to the business (Phones 4 U) Obscure (Apple, Virgin, Xerox)

5. + Different Business Names Put in order which business names you think are the most recognized?

6. + Benefits of having a good business name?

7. + Keeping Records All businesses have to keep records – an evidence of what has happened in the past. All records have to be honest and accurate. What types of records? Addresses/Telephone Numbers/Email Address of customers Employees A business will be required to keep certain records by law and they have to register themselves with the HRMC Different taxes paid Submitted to HRMC – who will work out if a business has paid to much/little tax.

8. + Record Keeping Good book keeping is the key to effectively managing the finances. Some small business owners could potentially hire an accountant. Small businesses need to keep receipts for every time they: Buy equipment Pay bills Receive invoices from suppliers Make payments and receive revenue from customers

9. + Taxes http://www.businessstudiesonline.co.uk/live/index.php?opti on=com_content&view=article&id=55&Itemid=33 http://www.businessstudiesonline.co.uk/live/index.php?opti on=com_content&view=article&id=55&Itemid=33

10. + Taxes on Small Businesses VAT (Value Added Tax) Tax on the value of sales of a business If your company earns more than £67,000 a year – that is only when you have to VAT to the government Income Tax If a business employs workers, they must take away some of their wages and pay the HRMC. If the business is a sole trader, the owners must pay income tax on their earnings. (Difference between Sales Revenue – Expenses of running their business)

11. + National Insurance Contributions Type of tax linked to number of government benefits such as a state pension and incapacity benefit. In order to get these benefits, and employee needs to pay a certain amount of National Insurance Contributions. If a company employs workers: They have to deduct NI contributions from their wages and pass them onto HRMC They also have to pay employer contributions.

12. + Corporation Tax Only paid by limited companies Tax paid on the profits of a company. Sole Traders will pay income tax on their profits.

13. + Tax considerations Tax is one of the factors that influence entrepreneurs about whether they become sole traders or limited companies. Keeping proper financial records for tax is a major cost to businesses in terms of time and effort needed to do it properly.