 today I've got a very very special guest and so in front of me I have Andrew now Andrew is going to introduce himself but I want to explain a bit about the reason why I've decided to bring Andrew onto the podcast so as most of you all know I speak with coaches every single day I work with coaches as well and some of the questions I get asked on a regular basis is to do with the startup and the legal side so I decided to bring Andrew on the podcast it took a little bit of convincing didn't it Andrew? Yeah it is. But he has decided to come on and what we're gonna do is we're gonna talk about different different things that coaches are asking me on a daily basis right and the purpose of it is to help you guys with making good business decisions and if you are based in the UK right Andrew is an accountant based in the UK he's one of my longest friends and he's also an accountant for my training business as well right so he's got a lot of experience but I'm gonna let Andrew introduce himself before I speak too much and I say stuff that might not be true. No thanks Leo yeah so yeah so I'm the founder of the law accounting services and I specialise obviously with UK businesses whether it be you know sole trader or limited companies online businesses as well and yeah I specialise with the startups I do have a passion for working with startups also growing businesses but with the startup side of things once you get the foundations right for business owners the rest of it is really really easy so yeah that's me in a nutshell. Nice good nice short introduction awesome so Andrew talk to us a little bit about the startup phases for coaches right because you've obviously worked with me I'm a coach myself in sport I have a training business I know you've also worked with other coaches as well so tell us a little bit about some of the struggles that coaches face with the legal side of of the business. Yeah so yeah initially I get a lot of queries with sports coaches that want to start their business journey and they're not really sure what business structure to start off with and it's normally just a conversation I have with them talking about what their plans are in the future and of course there are going to be tax implications with that what their personal circumstances are for example if they are employed or have they left employment so it's about finding a bit more information about the you know the the business owner or the to be business owner and it's to be honest it's just really educating them on how it really works and it's a lot of it is quite a big stress for sports coaches to understand the the tax and legal side of it so my job is to really explain to them in a very simple way how it all works and just you know reassure them that of course I'll be doing all the bookkeeping the accountancy side of things but especially if they become a limited company they have to learn a little bit more about their duties as maybe a director even if you're a sole trader as well you have to understand certain you know tax implications and duties you have to you know you have to go by as as a sole trader so so yeah that's that's mostly it with startups it is just that understanding how it all works yeah love that so I remember when when I was starting up and this is something that I feel like a lot of coaches do struggle with and that's one of the reasons why they reach out to people like myself is because they want to set up their business but they don't know where to look right or who to specialise in this type of niche okay because at the end of the day sports training is a specific niche in itself so talk to us a little bit about like so a lot a lot of coaches that watch our channel are coaches from all around the world but obviously because you're based in the UK I'm a UK trainer myself as well a lot of content that we're going to share today and you know the topics we're going to talk about are really are more specific to the UK but they can kind of be applied to other markets such as Canada US etc and if you are a coach watching in the US and Canada or another part of the world you can reach out to to me and just visit the in the description below there's the number of ways you can reach out so Andrew talk to us a little bit about so say I'm a coach that I'm looking to start a business I'm in the UK right what are the two main ways that I can set up my business legally yeah so good question so for the purposes here I want to be talking about a sole trader and a limited company by shares now that's not to say there are different business structures different legal entities which you can trade and to be honest they could be a separate podcast in itself you know you've got community interest companies which are kind of social enterprises you've got partnerships I'm right now want to focus on sole trader and limited company by shares and and how kind of sports coaches can decide which one to choose so essentially how I would start with the client is what's the air kind of commercial reason for for whatever business structure they decide to choose what I always say and this is this is something that's in the tax kind of community is never let the tax tail wag the commercial dog and what that means is is you should never let commercial decisions be 100% determined by the tax side of it of course that is a factor for sure but especially for sports coaches they have to look at what their future what their future journey is and what they want to do in the future whether it be employing people do they want to sell the company how much they want to grow it do they want funding as well so these are kind of all the things I would you know discussed with with the client and just to get a bit more into the specifics with a limited company and a sole trader i.e. self employed with a self-employed person there essentially let me just stop you right there Andrew so for anyone that's in the US that doesn't know what a private limited company is a private limited company out there would be an LLC correct yeah yeah yeah so be essentially an LLC and sole trader is self-employed yeah I had to bring that in because we do get a lot of American coaches watching so yeah no worries sorry to sorry to cut you out no no problem and to be honest it's true it's a lot of these things will actually relate to outside of the UK as well because they're very similar structures so with the self-employed the whole one of the biggest reasons of deciding whether to go limited or self-employed is what's called limited liability and the clues in the name with a self-employed person they're liable for the debts of the business and that obviously extends to their personal assets with a limited company you have that protection of your private assets and and that's why the limited liability does come in there it's limited to the amount of money you invested into the company now there is also another thing as well is that you can get lenders and even some suppliers that you're working with they may require a you know they may require directors to give a personal guarantee and that's essentially kind of where does it kind of extend to their personal assets as well so it's very very important to redefine print of it and and obviously that does reduce the benefit of a limited company that's one aspect of it the other aspect of it as well more specific to sports coaches is there may be some businesses that you may work with and that may maybe hiring sport facilities they may only want to work with limited companies and that's that's the honest truth of it they may not they may not see is as working with the sole trader if you want to hire some sort of sports facilities they may require it has to be done through a limited company not all of them of course but that can be a requirement also another thing as well depending on the specific industry within sports coaching because you can get different ones there it can be seen as you know you want to be seen as more established it can be me the seniors as more professional as well so that's another factor that you've got to take into account is the image that you would like to portray and certain industries you know on the outside of sports coaching doesn't really matter doesn't really matter and that's another thing as well where really really important for sports coaches to do their research within the industry they're in to make that decision another thing as well is the administration and the cost side of it so for example a limited company you're gonna be you're gonna be sending you know accounts to companies house you're gonna have to do a company tax return to HMRC you got to do a yearly confirmation statement the administrative burden is is a lot compared to you know being a sole trader so trade is very very simple also there's other things as well as a you know duty as a director you have to understand certain concepts and obviously we spoke about it as well Leo like a directors loan account what is that you know with a with a sole trader you can just take money out as and when you wish with a limited company it's a separate legal entity meaning that yes you can take money out but it's got to go through what's called a directors loan account and that could also be another podcast in itself but just to kind of mention that also the accrual basis of accounting you know with limited company you don't have the option to choose a cash basis of accounting which is a much simpler form of accounting limited company it's a cruel basis and it's understanding how that works as well another thing is in employment you know whether your sole trader a limited company you can employ you can't employ people the only difference is with a limited company you can employ yourself with a self-employed business you can't employ yourself and another thing as well is obviously the one that I guess a lot of people are you know interested in is is what's better in terms of the tax side of things generally speaking now each case has to be looked in specifically but generally speaking at the higher income of around a net income of around 45,000 per year it's generally more tax efficient to go through a limited company now that would vary as well because we've recently just had tax changes in April this year where limited companies above profits of 50k corporation taxes higher so things are changing it's and it's always really good to to definitely plan plan in advance and know these things because it always these things always change another thing as well is funding funding is something that sports coaches may want in the future whether it be through lending or maybe investment from from you know angel investors for example to help grow their business it's a lot more it's a lot easier to get funding it's not to say that you can't get funding through a self-employed business lot easier to get funding and there's a lot more options via a limited company so that's something that's quite quite quite important another thing as well is do you want to sell the business in the future same sort of thing with with the funding side it's a lot easier to sell your limited company then selling your sole sole trade business because they there won't be many investors who would want to buy into a sole trade business whereas a limited company that's a separate legal entity it's a lot easier to do that so you have more options there as well another thing as well which has to be mentioned is what do the code what do sports coaches want to do do they want to have it as a side side job yeah do they want it to be is it there can it be something that that is that that life purpose that they want to do going forward and that's the only thing they want to do and and they want to grow it that's another thing because if you want to just have it as a side business a self-employment route may be the way to go it's it's you know that that's completely fine as well and another thing as well is do you want to have partners you know if you want to have other partners in your business limited companies a lot easier to like you know get another director they can have a share a share in the company as well I kind of can be evenly split it can be allocated more shares in the future sole trader a little bit more tricky you'd maybe have to do like partnerships and things like that and it can be a little bit more tricky whereas we're limited company a lot easier to do that so that's another thing as well as a sports coach you may want to have you may want to work with other sports coaches as well going in the future so so that will be something as well that I will discuss with with clients as well and it's not to say that you can't change your mind later you can that that is definitely you know I've had had you know clients that they start off as a sole trader and they want to transfer to a limited company that is possible as well so it's not to say that you can't do that what I would say is planning is key and the earlier the better because transferring everything over you're talking about you know bank accounts possibly creating a new you know in terms of accounting software you may have to get a new package for that you've got to speak to your suppliers direct debits money you know that could be quite stressful so doing it early is is definitely important it is key as well to do that another things I want to touch on of course we can speak about so many areas in this but where so trader as well and it's more about the cash flow side of it with the sole trader if your if your tax bill is over a thousand pounds you have to pay what's called a payment on account and that's an advanced payment for the next year tax bill that can hinder your cash flow because that money you're paying to HMRC is for the next year's tax bill which you've got to pay but that money could be used for your business now for a limited company payment of account doesn't really exist doesn't exist you pay your tax bill and that's fine whereas a sole trader as I said if it's a tax bill over a thousand pounds they essentially have to pay half of that in advance which can hinder their cash flow where they could have invested it in other areas of their business yeah and just another thing as well with VAT now I know we're talking a lot about starting your business but VAT is essentially if your turnover goes over 85,000 for the year then you have to register for VAT now of course that's a bit beyond the scope for of this podcast but there are certain exemptions for sports sports coaches for VAT where they may want to get benefit of having a sole trade business and a limited company but as I said that's another that could be another podcast in itself so fantastic information and I think you broke it down really well for everyone and so I think also a fear that a lot of coaches have at the beginning when they're looking to set up he's finding an accountant that they can trust so someone that's gonna do a good job obviously the intent is to try and save the money so what are a couple of tips or pointers that you can suggest to coaches that are in that phase of looking for someone that's gonna do a good job for them yeah yeah and I think you know it really depends on who's gonna be working with you there's upsides and downsides of for example a large accountancy firm you may be dealing with if you've got payroll got your limited company you've got VAT you may be dealing with different people you know for example me I deal with you know I'm the only person that deals with my clients so I deal with everything in terms of the VAT the payroll corporation tax and that can be something that's quite important for business coaches because they may not get along with you know the department of VAT for example and you know I believe communications is key so any sports coaches that are looking to to work with an account an accountant is to understand who they're gonna be working with it's gonna be something that is very very important because that sense that working relationship is is so important going forward because you're gonna be working with them for essentially the whole journey of your business so I think that's something that's really important is that they have to really speak to as many accountants as they can and understand and and you know it all depends on the individual as well I have done me wrong I have some clients potential clients that have come to me and we've just maybe not worked well together they may see see things in a different light and that's okay as well you know there is there is someone out there there is an account out there for each business owner it's not to say that each any accountant can be suitable for you know all the all the you know all the businesses out there as well so that's something to think about another thing as well is it does the accountant want to understand your business because that's another thing that's really really important understanding your business is paramount to everything in terms of giving them tax guidance and if you have an accountant that works with other businesses in the same industry they can give you insight especially at the start of your business that that could help you to grow quicker as well and and to be honest this is something that I kind of pride myself on is is explaining to business owners accounting terms which they would need to know but in a very simple way because I find that's very very important it as I said it is the duty of the business owner to understand certain concepts to run your business perfect love that so Andrew well I want to thank you for coming on today and this is something that we're looking to do quite regularly and so today's topic was obviously we're touching on the best options that coaches have when they start up next podcast we'll be focusing on on another area of the legal side of of training and coaching so thank you again for for coming on here sharing your knowledge with our audience and what we're going to do is in the description if you want to get in contact with Andrew directly obviously Andrew works mainly with business owners in the UK so if you are a UK based coach or trainer and you want to start a business visit the description below and you can get in contact directly with Andrew through there that's awesome thanks for having me Leo awesome Andrew and I'll see you in the next one all right take care