Why I regretted not thinking about tax from day one
Tax wasn't a priority for us when starting-up. With hindsight
though I wish we had been more organised as it'd have saved time in
the long run.
Eight months into starting Launchlab, me and my partner
James got our first tax bill. It took us a little by surprise and
was a fairly arbitrary figure HMRC had seemingly calculated on the
assumption we'd made sales of 'x', incurred overheads of 'x' and
made a profit of 'x'.
Until then, we hadn't really thought about tax other than to
ensure we shoved all our receipts and invoices into a shoebox on
the assumption we'd deal with it down the line.
When you're first starting up the last thing you think about is
getting your tax in order - certainly not when you're still
researching your idea, perfecting your model, getting people
interested. Unless you're a naturally organised person - which I'm
not - it's just not a high priority.
All of sudden though we had a tax bill we needed to challenge, a
lot of quite official documentation to complete and we weren't in
shape at all.
We simply had to get organised - and quick. We'd actually bought
some accounting software right at the start but hadn't got as far
as taking it out of the box. We had no choice but to sit and wade
through eight months of receipts in one go, which took ages and
As soon as we'd done it and established a proper filing system
though we were able to access information so much easier.
We also took advice from our accountant and ran everything past
him to ensure our books were fully in order.
Clearly we should have listened and got organised from the start
because now we are, the whole tax thing is actually a bit of a
We underestimated the level of correspondence and documentation
that comes with tax, though - nothing is that challenging but it's
a nightmare if you don't have the figures and documents to
I've three: get a good accountant and listen to them; get some
good accounting software installed; and set yourself a simple but
organised filing system from day one.
It might not seem a priority or particularly exciting but it'll
save you a lot of time and hassle later on when, actually, your
business really needs your focus.
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