Compliance

You should register your business as soon as you begin trading or earning income from your activities. Choosing the right business structure is important:

• If you’re working alone and not setting up a separate legal entity, you can register as a sole trader with HMRC once your income exceeds £1,000 per year.
• If you want limited liability and a more formal structure, you can set up a limited company, which must be registered with Companies House and notified to HMRC.
• For joint ventures, a partnership may be appropriate and must also be registered.

Each structure has different tax, legal, and reporting obligations, so it’s advisable to seek our or other qualified accountant’s advice before deciding on a structure. Tip. Correct legal structure can save you a few hundred to a few thousand pounds but can also help limit your personal liability in case things go wrong.

This depends on your business structure, but typically includes:

• Income Tax (sole traders and partnerships)
• Corporation Tax (limited companies)
• National Insurance Contributions (NICs)
• VAT (if turnover exceeds £90,000 threshold)
• PAYE (if you employ staff)

Regularly review your tax obligations to avoid penalties and ensure proper budgeting for tax liabilities. Tip. By creating a separate tax pot or business saving account and setting money aside for tax will ensure your cashflow is always accurate. Talk to us on how to set this up.

Yes.

• Limited companies must file annual accounts and a confirmation statement to Companies House, as well as a Corporation Tax return to HMRC.
• Sole traders and partnerships file an annual Self Assessment tax return.

Missing deadlines can result in fines, so it’s important to keep track of key dates. By choosing us you ensure that you will never miss a deadline again. Tip. Create a recurring annual calendar reminder for important deadlines (at least a month before the deadline) to avoid missing the compliance obligations. Also, don’t rely on HMRC to remind you if something is due, they normally remind you once you are already incurring penalties.

All businesses must keep accurate records of:

• Sales and income
• Business expenses
• VAT (if registered)
• Payroll (if you employ staff)
• Bank statements and receipts

Records should be kept for at least 6 years, and must be complete, accurate, and available if HMRC requests them. HMRC accepts digital records and we support all cloud accounting software that can help you maintain accurate accounting information. Tip. During HMRC investigations and checks, typically they would check ten highest transactions. So make sure that you keep all the receipts for large purchases you make and don’t worry if you have lost one or two £3.50 coffee ones.

You must register for VAT if your taxable turnover exceeds £90,000 in a 12-month period. Voluntary registration is also possible below that threshold, which can benefit businesses that regularly deal with VAT-registered suppliers or want to reclaim input VAT. Once registered, you must charge VAT, submit regular VAT returns, and keep digital records in line with Making Tax Digital (MTD) rules. Tip. There are banks and inexpensive cloud accounting software that allow business owners to do their own submissions. If you are a small business and can’t afford services or a professional accountant, you can do all submissions on your own. We offer a one off advice service to help you setup and get going.