1.4.4 S TART - UP LEGAL AND TAX ISSUES What’s in a name? You will need a piece of paper and a pencil. Write your first name vertically on the left hand side of the paper Write your name in reverse, vertically, on the right hand side of the paper Write sentences linking each pair of letters stating something about a business Customers buy branded items because of the labeL Arsenal are the greatest football club eveR Radio stations often play popular groups such as AbbA Lowering costs can make a business more economiC Let’s hope your name isn’t too long!

1.4.4 S TART - UP LEGAL AND TAX ISSUES E STABLISHING A BUSINESS NAME  A business will require a name that will stand out from the competition  Your business name cannot be offensive or be deemed as sensitive  Try not to use a similar name to other businesses  Businesses spend a great deal of time and expense building their name up  For a sole trader it is not compulsory to register your business name

1.4.4 S TART - UP LEGAL AND TAX ISSUES U SING A TRADING NAME  A business might wish to develop its name further e.g. Luigi’s might develop multiple names such as Luigi’s Pizza, Luigi’s Pasta and Luigi’s Restaurants  The business can do this by developing trading names  This does not require registration and can be used by a firm as long as it does not breach trademarks (other businesses are already using it)  As it is not registered it could cause complications if someone else tries to use it

1.4.4 S TART - UP LEGAL AND TAX ISSUES I S YOUR BUSINESS NAME TAKEN ?  If you were to start a business what would you call it?  Is it easy to remember?  Does it tell you anything about your business?  Does it link you to the local area?  Is it available? Click on the information button. Search for a business name. Has it been registered?

1.4.4 S TART - UP LEGAL AND TAX ISSUES K EEPING RECORDS  A new business will have to register with Her Majesty’s Revenue and Customs (HMRC) who will require information for tax purposes  The law requires that a business keeps a record  It is important to keep detailed records relating to the following:  Value Added Tax  Income Tax  National Insurance  Corporation Tax

WHAT ARE THE TAXES? S TART - UP LEGAL AND TAX ISSUES Taxation is the way in which government finance their spending. Tax can be:  direct (paid directly by the individual)  indirect (paid when people spend on goods or services) Direct taxes include:  Income Tax – a percentage of people’s income  Corporation Tax – a percentage of business profits  National Insurance – payments made by employers and employees to pay for social security Indirect taxes include:  Value Added Tax – paid on the added value to a product made by a business. This is passed onto the consumer.

K EEPING RECORDS S TART - UP LEGAL AND TAX ISSUES Maintaining a good system of records:  Means that you don’t pay too much in tax  Avoids late payment penalties  Helps in getting a Bank Loan loan  Helps to reduce tax liabilities as any expenses will help to reduce profit

MULTIPLE CHOICE S TART - UP LEGAL AND TAX ISSUES 1. Which one of the following is a tax that a start-up business might have to pay? □ A Corporation Tax □ B Added Value □ C Fixed Costs □ D Council Tax 2. Which one of the following is a reason for an individual to keep a record of income? □ A To return faulty goods □ B To provide information to their accountant □ C To prove that they are successful □ D To pay inheritance tax