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Frequently Asked Questions

Clear answers to common accountancy questions — from self assessment to corporation tax, payroll to VAT. Browse by service or search below.

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Jump to: Bookkeeping 6 CIS Returns 4 Corporation Tax 4 Limited Company Accounts 4 Payroll 4 Self Assessment 6 Sole Trader Accounts 5 VAT Returns 5

Bookkeeping

Bookkeeping is the record of every pound in and out of your business. Done monthly it takes very little effort and gives you numbers you can act on. Left until

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Yes, and it is a fairly common starting point. We agree a fixed fee for bringing the records up to date, work back through the bank statements, and…
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Monthly for most businesses. It is the point at which the work is still small enough to be quick and recent enough that you remember what things were.…
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We work with QuickBooks, Xero, FreeAgent, Capium and Dext, so the answer depends on your business rather than on what we prefer. QuickBooks suits most sole traders and…
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MTD for Income Tax begins in April 2026 for sole traders and landlords with qualifying income above £50,000. The threshold falls to £30,000 in April 2027 and £20,000…
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CIS Returns

The Construction Industry Scheme requires contractors to deduct money from subcontractors' payments and pass it to HMRC as an advance on the subcontractor's tax. Deduction is 20% for subcontractors registered

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As a sole trader subcontractor, the deductions suffered during the year are offset against your Self Assessment liability, and any excess is refunded. Because deductions are taken before…
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20% for subcontractors registered under CIS, 30% for unregistered ones, and nothing for those holding gross payment status. Deductions apply to the labour element only — materials, plant…
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Gross payment status means contractors pay you in full with no deduction, which is a substantial cash flow advantage. To qualify you must pass a business test, a…
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Anyone who pays subcontractors for construction work. That includes obvious construction businesses, but also so-called deemed contractors — businesses outside construction that spend more than £3m on construction…
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Corporation Tax

A limited company pays corporation tax on its profits. The rate is 19% for profits up to £50,000 and 25% above £250,000, with marginal relief tapering between the two —

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Possibly, but the rules have tightened considerably and HMRC scrutinises claims closely. The work must seek an advance in science or technology and resolve genuine technical uncertainty that…
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The main levers are capital allowances on equipment, employer pension contributions, getting the salary and dividend split right, and making sure every genuine business cost has actually been…
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19% on profits up to £50,000 and 25% on profits over £250,000. Between those figures marginal relief applies, which produces an effective marginal rate of 26.5% on the…
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Nine months and one day after the end of your accounting period. The CT600 return is not due until twelve months after year end, so payment comes first…
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Limited Company Accounts

A limited company must prepare statutory accounts every year, file them at Companies House, and submit a fuller set to HMRC with its corporation tax return. Miss the Companies House

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For most owner-managed companies the efficient approach is a modest salary set around the National Insurance thresholds, which preserves your State Pension record and is deductible against corporation…
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Accounts are due at Companies House nine months after your accounting reference date. Your corporation tax return is due twelve months after year end, but the tax itself…
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Companies House penalties are automatic and are not waived for being nearly on time: £150 up to one month late, £375 up to three months, £750 up to…
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It records money moving between you and the company outside salary and dividends. If you owe the company money at year end and it is not repaid within…
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Payroll

If you employ anyone, including yourself as a director, you need a PAYE scheme and you must report to HMRC on or before every payday under Real Time Information. Payroll

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If you draw a salary, yes. You need a PAYE scheme and RTI submissions even where the salary is below the threshold at which tax and National Insurance…
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You must assess every member of staff on each pay run and automatically enrol anyone aged between 22 and State Pension age earning over £10,000 a year. Minimum…
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HMRC charges monthly penalties for late RTI submissions based on the number of employees, starting at £100 a month for very small employers and rising with headcount. The…
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By the 22nd of the following tax month if you pay electronically, or the 19th if you still pay by post. Small employers whose average monthly liability is…
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Self Assessment

A Self Assessment tax return tells HMRC what you earned outside PAYE and works out what you owe. You'll need to file one if you were self-employed and turned over

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You generally need to file if you were self-employed with turnover over £1,000, received rental income, are a company director taking dividends, made a capital gain above the…
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Anything incurred wholly and exclusively for the business. For most sole traders that covers stock and materials, tools and equipment, business insurance, accountancy fees, business travel and mileage,…
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There is an automatic £100 penalty the day after the deadline, even if you owe no tax. After three months it becomes £10 a day up to £900,…
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An online return for the tax year ending 5 April must be filed by 31 January the following year, and any tax owed is due the same day.…
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Sole Trader Accounts

Sole trader accounts pull a year's trading into one clear set of figures: what you turned over, what it cost you, and what profit you actually made. Unlike a limited

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Yes. There are two approaches. The simplified flat rate gives you a fixed monthly amount based on hours worked from home, which needs no receipts and suits most…
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No. Unlike a limited company you do not file accounts at Companies House and there is no public record of your figures. Your only legal obligation is to…
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Enough to show how you arrived at the figures on your return: sales invoices, purchase receipts, bank statements, mileage logs, and records of any goods you took for…
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There is no single profit figure where it always makes sense, but the question becomes worth asking somewhere around the point where your profits comfortably exceed what you…
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VAT Returns

You must register for VAT once your taxable turnover passes £90,000 in any rolling twelve months, or if you expect to pass it within the next thirty days. It is

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Sometimes. If your customers are VAT-registered businesses, they reclaim whatever you charge, so registering lets you recover VAT on your own costs at no real cost to them.…
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HMRC's points-based system gives you a penalty point for each late return. Once you reach the threshold for your filing frequency — four points for quarterly returns —…
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Under the Flat Rate Scheme you charge customers the normal 20% but pay HMRC a lower fixed percentage of your gross turnover, keeping the difference. In exchange you…
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When your taxable turnover exceeds £90,000 in any rolling twelve-month period, or when you expect to exceed it in the next thirty days alone. The rolling test is…
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Need help with VAT Returns? Visit our complete service guide for locations, prices and expert advice.

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