Accountants for startups in Watford and Hertfordshire

Building a new business from Watford

A lot of new businesses in this part of Hertfordshire start in a spare bedroom in Abbots Langley or a kitchen in St Albans, then move into a shared desk once the first contracts land. Watford is a practical base. Watford Junction has fast trains to London Euston, with the quickest taking around 16 minutes, and there are flexible offices on Clarendon Road, a short walk from the station, and at Croxley Park on the west side of town.

Founders also have local help beyond their accountant. The Hertfordshire Growth Hub describes itself as the central point of access for business support in the county, and it is worth a look for advice, training and mentoring.

What founders usually need from us is simpler than they expect. They want to know what to file and when, how to pay themselves without a tax surprise, and how to keep the books in a state an investor or bank would trust.

The first twelve months, step by step

Registering a company with Companies House is quick, often within a day or so when done online. Every director and person with significant control now has to verify their identity, and a company cannot be formed with a director who has not done so. You will also need a registered office address in the right part of the UK and a registered email address.

After that, the deadlines start. You must tell HMRC within 3 months of the company starting to trade that it is active for corporation tax. If you pay anyone, including yourself as a director, you need to register as an employer before the first payday. Your first accounts are normally due 21 months after the date the company was formed, and later accounts are due 9 months after each year end.

We put these dates in a simple calendar for you at the start, so nothing depends on you remembering a letter that arrived months ago.

• Company formed and identity checks done
• Corporation tax registration within 3 months of starting
• PAYE registration before anyone is paid
• VAT registration if turnover will pass £90,000
• First accounts and tax return after the first period ends

Accountants for startups and investor tax relief

If you plan to raise money from angels or friends and family, the Seed Enterprise Investment Scheme, known as SEIS, and the Enterprise Investment Scheme, known as EIS, can make your company far more attractive. Investors in qualifying SEIS shares can get 50% income tax relief on what they put in, and EIS investors can get 30%. Gains on the shares can be free of capital gains tax if the shares are held for at least 3 years and the conditions are met.

The rules on what kind of company and trade qualify are detailed, and it is easy to break them by accident, for example by issuing shares the wrong way. Many founders apply to HMRC for advance assurance first. This is HMRC's view on whether a planned investment is likely to qualify, and you can show it to investors, although it is not a guarantee or an endorsement of the business.

Good accountants for startups in Watford will help you plan the round before money changes hands, then handle the compliance statement that lets investors claim their relief afterwards.

Research and development relief for new companies

If your startup is solving a genuine technical or scientific problem, it may be able to claim R&D tax relief. For accounting periods starting on or after 1/4/2024 there is a merged scheme for most companies, with extra support for small companies that spend a large share of their costs on R&D and are making a loss.

First time claimants usually have to tell HMRC in advance, within 6 months of the end of the period, and every claim needs a detailed information form before the company tax return goes in. We help you decide early whether your work is likely to qualify, so you keep the right records from day one.

Paying yourself and your first team

In the early days most founders take very little out of the business. When you do start paying yourself, it usually means a mix of a small salary through payroll and dividends from profits. Dividends can only be paid from profits the company has made, which is why a loss making startup needs care here.

Taking on staff brings payroll, workplace pension duties and employer National Insurance at 15% on pay above the threshold. Many small employers can claim the Employment Allowance, worth up to £10,500 a year, to reduce that bill. A company where the only paid employee is a single director cannot claim it, so it often becomes useful once your first hire joins.

Keeping the numbers investor ready

Investors and lenders want to see figures they can rely on. That means a cloud bookkeeping system kept up to date, a bank account used only for the business, and monthly reports that show how fast cash is going out and how long it will last.

Accountants for startups should make this easy. We set up software such as Xero for you, connect your bank feeds and agree a simple monthly routine. When a potential investor in Hertfordshire or London asks for management accounts, you can send them the same afternoon.

Common questions