Irrespective of what kind of business you are starting, doing it involves a whole host of obligations that need to be fulfilled. Some may be temporary and one-time affair, while others may continue through the years.

Some of the common obligations you should adhere to include informing the HMRC that you have started your business, getting insurance, and registering your business for VAT. Compliance of these regulations is necessary if you want to start your business successfully otherwise you are likely to incur hassles and problems along the way.

Legally required insurance

It is always good to look at insurance as an absolute must for your company. However, even if you do not provide all insurance, there are some that are demanded according to the stipulations of the law. The important ones that you must have include Employer’s liability insurance, motor insurance, insurance that covers any contracts you may have as well as insurance for certain types of engineering equipment that would be best covered.

Though some of these are demanded by law, there is other insurance cover that you, as a self-employed person should take, to protect yourself.

Registering your business for VAT

There is a VAT registration threshold that is susceptible to increases every year. Currently, this threshold is at £82,000. Businesses need to be compulsorily registered for VAT and this needs to be done the moment the turnover of the business for a year exceeds the VAT registration threshold.

Also, if you decide to takeover another business, which happens to be VAT registered, you will need to register your company as well. You are also obligated to register your business VAT if you think your turnover will exceed the VAT threshold within the period of a month. And, if you decide to trade outside the UK, VAT registration would still be compulsory.

Though these are the moments when companies should register themselves for VAT, it does not mean that a company, whose taxable turnover does not surpass the VAT threshold, can’t register. They certainly can. So, you don’t register on time, be prepared to face a strict penalty.