Press Release

February 2006

Penalties could catch out new business start-ups

A Congleton based chartered accountant who specialises in new business start-ups is alerting those launching as sole traders to beware of being hit by a £100 penalty for failing to declare their self-employed status required under tax and National Insurance regulations.

Paul Austen, of Paul Austen Associates in Wagg Street, Congleton, said: “Most people may be well aware of the £100 penalty for failing to submit their self-assessment tax return by the 31st January deadline which went by only recently.

“But those setting up for the first time as sole traders may not realise that another £100 penalty may be imposed on anyone who fails to declare their new self-employed status for National Insurance purposes within the first three months of trading.”

Those in business as sole traders are obliged by law to pay a weekly self-employed National Insurance payment of £2.10 for last year’s tax year from 6 April 2005 to 5 April 2006, plus an additional annual sum that is related to earnings over the year.

Mr Austen, a member of the Institute of Chartered Accountants in England and Wales has set up a web site www.paulausten.co.uk which provides a special service for new business start-ups offering fixed priced quotes for tax and VAT returns for sole traders. He is also providing new businesses with insurance cover of up to £50,000 in accountancy fees to contest any unexpected tax or VAT investigations by Her Majesty’s Revenue and Customs.

“One of the biggest mistakes anyone going into business for the first time can make is to get into difficulties with their tax or VAT responsibilities. Red tape and regulations can tie up a business in knots, and if not addressed properly from the very start, it could end up with an unexpected tax bill which could bring a fledgling business to a very premature end,” he warned.

Paul, who shares office premises in Congleton with his father, John, a chartered surveyor, and his older brother Ben, a web site developer, is also looking at the possibility of launching a series of networking clinics especially to cater for the growing number of new business start-ups in towns and villages around Congleton borough.