Beware the pubs official business adviser

Beware the pubs official business adviser

I couldn’t resist telling this true story that I was involved in at the pub recently (it was a Saturday, I deserved a beer!).

One of the pub regulars is setting up a shop in the local town. It is due to open in a few months and so their is plenty of time to get set up.

I have known this for a while and they had informed me in the past that they do not need an accountant as their partner is doing the books due to experience in law and accounts. I was not touting for their business so I didn’t put any pressure on (I wouldn’t have done anyway!).

We were talking away and they are obviously excited about the business. In general chat I asked whether they were going to form a Limited Company or trade as a Sole Trader . The response was that they did not want to become limited as they did not want to register for VAT. Earlier in the conversation it was stated the anticipated turnover in the first year would be approximately £250k. Where did they get this advice; the mate from the pub of course!

So, to get the technical part out of the way – as most people will be aware the VAT threshold is relevant for any business entity, whether a sole trader or a Company. Incidentally, a Limited Company does not have to register if it is below the threshold.

And then to the main point – if you are setting up your own business, please go and see an accountant or three and ask some basic questions! Use the consultation offers that most will have available. Or if you must take advice in the pub, go and ask the accountant!

Its amazing what you learn about business down the pub. Needless to say, they are now taking advantage of the PAH Accounting 1 hour consultation.

If you are thinking of setting up a new business feel free to get in touch with PAH Accounting as we offer a free initial consultation.