Accountants for
Startups

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 personal use. Digital copies are fine and HMRC accepts photographs of receipts.

Keep them for five years after the 31 January filing deadline for that tax year. Under Making Tax Digital the records will need to be kept digitally, which is one reason we set clients up on software early.

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 people. Alternatively you can apportion actual costs — rent or mortgage interest, council tax, utilities, insurance — by the number of rooms used and the time they are used for business.

The apportioned method usually gives a larger claim but requires records. We work out which is better for you rather than defaulting to the easy one.

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 must be paid nine months and one day after year end — so payment comes before the return is due.

A first set of accounts is different: they are due 21 months after incorporation. We put all of your dates in writing at the start so nothing creeps up.

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 six months and £1,500 beyond that. They double if you also filed late in the previous year.

HMRC applies its own separate penalties for a late corporation tax return, starting at £100. Persistent late filing can also lead to the company being struck off.

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 tax, with the balance drawn as dividends.

The exact split depends on your other income, whether the Employment Allowance is available to your company, and how much you actually need to draw. Dividends can only be paid out of accumulated post-tax profits, so the company has to have the reserves. We run the numbers rather than applying a rule of thumb.

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 nine months and one day, the company pays a temporary section 455 charge of 33.75% on the balance until it is cleared.

Balances over £10,000 also create a taxable benefit in kind unless you pay the company interest at HMRC’s official rate. It is one of the most common and most avoidable problems we see, and it is much easier to manage during the year than to unwind afterwards.