Dealing with headaches

In some ways life is certainly simpler if you are working for somebody else. Income Tax and National Insurance are deducted automatically. Value Added Tax (VAT), business rates and employer’s responsibilities are somebody else’s concern. Working for yourself may present problems that will always end up on your desk and the answers to them are not always simple.

Fortunately, there are ways that these problems can be minimised. Most importantly, you should take professional advice from an accountant or a solicitor on which of these areas you will be liable for and how you should go about registering for them. For example, you only need to register for VAT if your business turnover exceeds a certain level, e.g. £ 35, 000. However, it may be in your interest to register even if your income is below that level so that you can reclaim the VAT you pay on certain goods.

You won’t need to pay income tax regularly each week or month. But you will be assessed for tax at the end of each tax year, according to your profits, and will then pay tax in a series of lump sums.

The cost of things you buy to run your business will be deducted from your earnings for tax purposes and you will be taxed on the remainder (less also your personal allowances). While the cost of things like new equipment and tools will normally be deducted in full, the position is more complicated if, for example, you use things like your home phone or your car for both business and personal use. An accountant will tell you what can count as legitimate business expenses and what can’t.

Remember to keep the receipts for things you need to buy before you actually start trading, as these may be “allowable” expenses.

Keeping track of your business’s financial affairs is not only important for your success, it is a legal requirement. An accountant will be able to advise on exactly what records you need to maintain and how to keep them – for example, you need to keep complete records of your earnings and expenses (including all receipts). You can keep records yourself, or it may pay you to employ the services of an experienced book-keeper, probably for only a few hours a week at first because this will leave you free for more productive tasks.

Notes: less – мінус

Exercise 1. Read the text and answer the questions.

1. Is Income Tax always deducted automatically?

2. What is somebody else’s concern if you are not running your own business?

3. In what case do problems end up on your desk?

4. In what way can problems be minimized?

5. In what case do you need to register for VAT?

6. Why can it be in your interest to register for VAT?

7. How often will you be assessed for tax?

8. In what case are you in difficulties to know what is legitimate and what is not?

9. Why is it necessary to keep the receipts?

Exercise 2. Match the phrases on the left with their Ukrainian equivalents on the right.

Exercise 3. Complete the sentences.

1. Income Tax and National Insurance are (відраховують)…automatically.

2. Fortunately, there are ways that these problems can be (зведені до мінімуму)….

3. Most importantly, you should take professional …from an accountant or a ….

4. For example, you only need to register for VAT if your business …exceeds a certain … e.g. £ 35, 000.

5. However, it may be (у ваших інтересах)… to register even if your … is below that level so that you can (вимагати повернення)…the VAT you pay on certain ….

6. But you will be assessed for tax at the end of each … year, according to your (прибутку)…, and will then pay tax in a series of (сум одним внеском)….

7. The … of things you buy to run your business will be (вирахувана)… from your earnings for tax purposes and you will be taxed on the (залишок)….

8. An accountant will tell you what can (враховано)… as (законні)… business expenses and what can’t.

9. Remember to keep the … for things you need to buy before you actually start trading.

Exercise 4. Complete the gaps in the passage below using the phrases from the list. You may need to change the form of some of the words. Definitions are given in brackets to help you.

1) overcome difficulties; 2) set up a business; 3) raise finance; 4) take on the challenge; 5) take on a partner; 6) turn down a request; 7) run the risk.

Half a million people 1 …(start a company) each year in the UK, even though they 2…(face the danger) of failing. Statistics have shown that within three years, 45% of them go out of business, many losing all their money. What sort of people want to be entrepreneurs when there is such a high failure rate? They tend to be motivated, creative and eager to 3…(accept something that is difficult but interesting) of being their own boss. They are resilient and able to 4 …(find ways around problems) when, for example, the bank 5…(rejects an application) for a loan. Instead of giving up, they will look for other ways to 6… (obtain capital) such as 7 …(engaging a business associate).

Exercise 5. Complete the statements with the words in the box.

To succeed in business you should:

1. value your _____.

2. focus only on making a big ____.

3. pay employees low ______.

4. charge high _____.

5. never break the _____.

6. avoid paying ___.

7. believe the ___ is always right.

8. invest in the local _____.

9. put your ____ out of business.

10.be prepared to make a _____ for at least the first year.

Exercise 6. Translate into English.

1. Ви хочете займатися індивідуальною підприємницькою діяльністю?

2. Заснування бізнесу потребує розумного планування і ризику.

3. Щоб почати бізнес, вам доведеться зіткнутися з багатьма труднощами.

4. Сила волі, рішучість і наполегливість є дуже важливі риси успішного бізнесмена.

5. Чому вам доведеться підтримувати темп?

6. Ваші проблеми можна звести /можуть бути зведені до мінімуму.

7. Податок на прибуток відраховують автоматично.

8. Вартість обладнання буде відраховано повністю / у повній мірі.

9. У кінці податкового року вас перевірять / проведуть оцінку на предмет оподаткування.

10.Чи ви можете вести записи самі?

11.Коли ваш оборот перевищує певний рівень?