Every business needs to have certain documents in order to trade. You will need VAT registration, and Companies House certificates, if you are a limited company. If you are a sole trader you’ll still need to have evidence of business expenditure or, proof of insurance, depending on the nature of your enterprise.
Legal documents are important
If you are an employer you’ll also need to have to have confirmation of a person’s legal right to work in the UK. You may need to have some of these documents authenticated, and it’s a good idea to use the services of a notary; Vanner Perez Notaries are experts in this field. You can face a fine of up to £20,000 should you employ an illegal worker, so it’s vital that you are sure that all of your employees have the right to work in the UK. The website Freelance Advisor has more information on this subject.
Another set of documents that you must have if you are an employer is proof that you have Employer’s Liability insurance. According to the Association of British Insurers, your insurance must cover you up to £5 million as a basic legal requirement. Most policies will offer £10 million protection. Make sure that your policy protects temporary and student staff as well as full time employees. If you employ volunteers and apprentices you should inform your insurance company and they will advise you. It’s vital that you have this type of insurance in place; otherwise you could face a fine of ‘£2,500 for every day that insurance is not in place.’
Tax documents must be maintained
Any business, whether operating as a sole trader from the back room in a home office, or as a limited company, needs to keep documents that will be used for the purpose of filling in your annual tax return. Her Majesty’s Revenue and Customs (HMRC) states that ‘if you don’t have adequate records, or if you don’t keep them for long enough, you may have to pay penalties.’
This requirement is to ensure that if HMRC wants to query an item on your tax return, you’ll be able to supply any proof required. You don’t have to keep paper records, and you can scan the information onto an electronic device. There are different penalties and time limits for different types of companies, so it’s always a good idea to visit the HMRC website for more detailed information.
Different trades need different documents
Health and Safety legislation was introduced in order to protect employees and employers. Even if you only employ five members of staff, you will have to adhere to health and safety legislation. Your local authority or the Health and Safety Executive (HSE) will be able to advise you about the current regulations. You are required under law to write a health and safety policy for your business, and an easy way of finding out more about this policy is to visit the HSE website.