Frequently Asked QuestionsBelow are some frequently asked questions of Milestone, see if yours is amongst them. If it isn't, why not email or call us we're here to help.
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| Q A | When do I pay my tax liability? It is due by 31 January each year and is in relation to profits made up to 05 April in previous year. |
| Q A | What am I taxed on? Profits of the pub and any other income received outside the business. |
| Q A | What about my Drawings? You are not taxed on your Drawings (Taking Drawings do not affect your Tax liabilities). |
| Q | What are the benefits of introducing a Motor Vehicle as an asset to the business? |
| A | If you buy a brand new van you can reclaim all VAT paid on the purchase price. For all Motor Vehicles you are allowed to claim back fuel and running costs and any VAT paid on these expenses (including Fuel Scale Charges). A capital allowance of 25% is deducted against your net profits at the end of each year to a maximum of 3,000 in any year. |
| Q | How much cash can I take in the form of Drawings each month? |
| A | It is recommended to keep Drawings minimal for the first few months to establish a Cash Flow and then not to exceed 75.0% of your net profits so as not to drain the business of its funds. |
| Q | Should I set my business up as a limited company or a sole trader/partnership? |
| A | There are three basic types of legal status available for a new business to trade through - limited company, sole trader and partnership. The advantages of setting up as a limited company can include better access to outside finance; limited liability; advantageous tax treatment, and the more convenient management structure. Generally the higher the turnover and profit, the more reason for trading as a limited company. This, though, brings with it some administrative burdens and legal requirements. From a purely financial point of view, it may generally be advantageous for a new business to start as a sole trader/partnership, and then become a limited company as the business develops. It can be much more difficult to do it the other way round. |
| Q | Should a legal agreement be drawn up on setting up a partnership? |
| A | It is advisable that all partnerships set up outside a marriage should have a legal agreement drawn up, this will resolve any issues within a business much easier if there were to be a split or termination to the partnership or business. As for partnerships involving marriages, any major issues would end up in the divorce courts anyway. |
| Q | What can I put through the business in the form of pre-trading expenditure? |
| A | In a Sole Trader or Partnership business expenses such as travel, legal, professional and any costs in relation to the setting up of the business are allowable. |