6 ms·

Dunno about that. I live in the US. I can start a small business today and the only thing I'd have to do differently is file an additional form on my taxes next

Dunno about that. I live in the US. I can start a small business today and the only thing I'd have to do differently is file an additional form on my taxes next year. Yes, that's a simplification that doesn't apply to every situation, but it is still completely accurate.

tengwar2 23d ago
That's pretty much the situation in the UK if you are a sole trader. If you set up a limited liability company, that's a separate entity and has its own tax reporting requirement, but nothing onerous. I am a sole trader, and manage a small company separately from that. One thing I have heard of in the USA is the need for a "business licence". I'm not sure what that is or whether it applies to all businesses, so I'm not sure what it would correspond to in the UK. Neither of my businesses needed any licences or permissions to start trading.
- Gormo 23d ago
  There's no standard concept of a "business license" in the US either. Generally, the corporate registration / LLC filing is all you need to start doing business as a limited liability company, and you don't need to do anything special as a sole proprietor. Sometimes state and local governments have special requirements for particular types of activity, and require registration to begin operating in a regulated field. City and county governments sometimes have a business tax that you have to pay if you're operating a facility open to the public, and may require the tax receipt to be on display on your premises.
  - corford 23d ago
    Same with UK LLPs
- dudul 23d ago
  > One thing I have heard of in the USA is the need for a "business licence" Where have you heard about that? Because there is no concept of universal business license.
- sjsdaiuasgdia 23d ago
  It's a term sometimes colloquially applied to one or more things that are not actually a "business license". Some jurisdictions require "Certificates of Occupancy" if the ownership of a commercial property changes. This is more about the state of the structure and modifications made to it. Some jurisdictions require registration with a state or county tax authority. In my state this is called a "business registration". Depending on jurisdiction, you may not be allowed to legally operate a for-profit business without this registration. So there are frequently government-issued documents that are not called a "business license" but may be required to legally do business.
- Silhouette 23d ago
  That's pretty much the situation in the UK if you are a sole trader. If you set up a limited liability company, that's a separate entity and has its own tax reporting requirement, but nothing onerous. It's becoming more onerous all the time to run a small business in the UK though. We just got charged £100 just to essentially tick one box with Companies House saying "nothing changed since last year". The main tax paperwork is the annual financial statements. These are getting more demanding over the next couple of years with the simplified versions that small companies have been allowed to file looking like they will no longer be acceptable after that time. You now have to file tax returns like PAYE and VAT using approved software. Most of that software - even the big names - ranges from OK but with significant problems and limitations to simply awful. I heard recently that personal self assessment tax returns for company directors are about to get more complicated as well. If you have business premises then you have to deal with business rates. Often these are still based on valuations from a time when dinosaurs roamed the planet. Some small businesses have already closed down due to this becoming unaffordable. I've lost count of how many different kinds of insurance we now have. All have a cost of course. If you're working solo or the only person from your company working with a specific customer/client then you need to worry about Off Payroll Working as well. That's still a huge mess of ambiguity decades after IR35 was introduced and likely incurs further expenses for legal reviews and insurance policies that shouldn't even need to exist. Control any personal data? Make sure you register with the ICO and pay their fee too. Sell online or even run a website? Make sure you know the requirements for information you have to provide and it's in exactly the right format for compliance. (I've even seen businesses working in the compliance industry failing on this one and risking regulatory sanctions.) The public sector is increasingly pushing for things like Cyber Essentials if you want to be part of its supply chain. That is an absolutely textbook example of regulations that were clearly written for large businesses using a certain operating system. The only options are 100% compliance or failing and 100% compliance is tricky for sole traders or microbusinesses to achieve without disproportionate expense and administration. If you need the certified version then that's another cost and the disruption of being audited to deal with. We haven't even talked about everything you have to do if you want to take on employee #1 who isn't one of the founders/owners yet. I don't think it's realistic to say that the UK is supportive of small businesses today. It never really was but at least the the potential financial benefits used to justify the overheads. Now the taxes are far higher - you end up paying double-digit higher overall rates if you set up a Ltd that can actually grow as a business compared to simply trading as a self-employed sole trader now - and the overheads and costs are also far higher in numerous ways. It's no surprise that people are deterred from going into business here and that's really bad for the country because we need the people willing to take the risks and put in the effort to build the next generation of businesses to support our economy and provide much-needed new jobs.
senderista 23d ago
And you'd need to line up your own health insurance.
- HeyLaughingBoy 23d ago
  Usually not if you already have a day job. But that's completely orthogonal to the original statement.

tengwar2 23d ago

That's pretty much the situation in the UK if you are a sole trader. If you set up a limited liability company, that's a separate entity and has its own tax reporting requirement, but nothing onerous. I am a sole trader, and manage a small company separately from that. One thing I have heard of in the USA is the need for a "business licence". I'm not sure what that is or whether it applies to all businesses, so I'm not sure what it would correspond to in the UK. Neither of my businesses needed any licences or permissions to start trading.

Gormo 23d ago
There's no standard concept of a "business license" in the US either. Generally, the corporate registration / LLC filing is all you need to start doing business as a limited liability company, and you don't need to do anything special as a sole proprietor. Sometimes state and local governments have special requirements for particular types of activity, and require registration to begin operating in a regulated field. City and county governments sometimes have a business tax that you have to pay if you're operating a facility open to the public, and may require the tax receipt to be on display on your premises.
- corford 23d ago
  Same with UK LLPs
dudul 23d ago
> One thing I have heard of in the USA is the need for a "business licence" Where have you heard about that? Because there is no concept of universal business license.
sjsdaiuasgdia 23d ago
It's a term sometimes colloquially applied to one or more things that are not actually a "business license". Some jurisdictions require "Certificates of Occupancy" if the ownership of a commercial property changes. This is more about the state of the structure and modifications made to it. Some jurisdictions require registration with a state or county tax authority. In my state this is called a "business registration". Depending on jurisdiction, you may not be allowed to legally operate a for-profit business without this registration. So there are frequently government-issued documents that are not called a "business license" but may be required to legally do business.
Silhouette 23d ago
That's pretty much the situation in the UK if you are a sole trader. If you set up a limited liability company, that's a separate entity and has its own tax reporting requirement, but nothing onerous. It's becoming more onerous all the time to run a small business in the UK though. We just got charged £100 just to essentially tick one box with Companies House saying "nothing changed since last year". The main tax paperwork is the annual financial statements. These are getting more demanding over the next couple of years with the simplified versions that small companies have been allowed to file looking like they will no longer be acceptable after that time. You now have to file tax returns like PAYE and VAT using approved software. Most of that software - even the big names - ranges from OK but with significant problems and limitations to simply awful. I heard recently that personal self assessment tax returns for company directors are about to get more complicated as well. If you have business premises then you have to deal with business rates. Often these are still based on valuations from a time when dinosaurs roamed the planet. Some small businesses have already closed down due to this becoming unaffordable. I've lost count of how many different kinds of insurance we now have. All have a cost of course. If you're working solo or the only person from your company working with a specific customer/client then you need to worry about Off Payroll Working as well. That's still a huge mess of ambiguity decades after IR35 was introduced and likely incurs further expenses for legal reviews and insurance policies that shouldn't even need to exist. Control any personal data? Make sure you register with the ICO and pay their fee too. Sell online or even run a website? Make sure you know the requirements for information you have to provide and it's in exactly the right format for compliance. (I've even seen businesses working in the compliance industry failing on this one and risking regulatory sanctions.) The public sector is increasingly pushing for things like Cyber Essentials if you want to be part of its supply chain. That is an absolutely textbook example of regulations that were clearly written for large businesses using a certain operating system. The only options are 100% compliance or failing and 100% compliance is tricky for sole traders or microbusinesses to achieve without disproportionate expense and administration. If you need the certified version then that's another cost and the disruption of being audited to deal with. We haven't even talked about everything you have to do if you want to take on employee #1 who isn't one of the founders/owners yet. I don't think it's realistic to say that the UK is supportive of small businesses today. It never really was but at least the the potential financial benefits used to justify the overheads. Now the taxes are far higher - you end up paying double-digit higher overall rates if you set up a Ltd that can actually grow as a business compared to simply trading as a self-employed sole trader now - and the overheads and costs are also far higher in numerous ways. It's no surprise that people are deterred from going into business here and that's really bad for the country because we need the people willing to take the risks and put in the effort to build the next generation of businesses to support our economy and provide much-needed new jobs.

senderista 23d ago

And you'd need to line up your own health insurance.

HeyLaughingBoy 23d ago
Usually not if you already have a day job. But that's completely orthogonal to the original statement.