Starting a Business? Understand Your Accounting & Tax Obligations First

03 Jul 2025

Published in: Member News
New business owners must choose the right structure and stay on top of key tax and accounting duties. This guide highlights essential compliance steps to avoid penalties and support long-term success.

Starting a New Business? Don’t Let Accounting & Taxes Hold You Back!

When you decide to start a business, the first crucial step is choosing the right business structure:

  • Sole Trader – Simple setup, full control, personal liability.
  • Limited Company (Ltd) – Separate legal entity, tax-efficient, more compliance.
  • Partnership – Shared responsibility, profits split between partners.

Once your structure is in place, you need to understand your accounting & tax obligations:

  • Sole Trader Responsibilities
  • Register with HMRC for Self-Assessment
  • Keep records of income & expenses
  • Submit a Self-Assessment tax return yearly
  • Pay Income Tax & National Insurance
  • Limited Company Responsibilities
  • Companies House Filings
  • Confirmation Statement (CS01) – Due annually, within 14 days of the due date.
  • Annual Accounts – Due 9 months after the financial year-end (or 21 months after incorporation for the first accounts).
  • Corporation Tax & HMRC Filings
  • Corporation Tax Return (CT600) – Due 12 months after the year-end.
  • Corporation Tax Payment – Due 9 months & 1 day after the year-end.
  • PAYE & Payroll (If You Have Employees or Pay Yourself as a Director)
  • Monthly RTI (Real-Time Information) submissions – Due on or before payday.
  • PAYE & NI Payments – Due by the 22nd of the following month (or 19th if paying by post).
  • VAT Returns (If VAT-Registered) Due quarterly, 1 month & 7 days after the VAT period ends.

Must comply with Making Tax Digital (MTD).

Making Tax Digital (MTD) – What You Need to Know

MTD for Income Tax Self-Assessment (ITSA) starts from April 2026 for sole traders and landlords earning over £50,000, requiring digital record-keeping and quarterly updates.

MTD for VAT is already mandatory for all VAT-registered businesses.

Key Takeaways

  • Missing deadlines can result in penalties, interest, or even company strike-off.
  • Use accounting software to track deadlines automatically.
  • Consider hiring an accountant to ensure compliance and avoid late fees.

Confused about where to start?

As an ICAEW Chartered Accountant, I help small businesses navigate these challenges so they can focus on growth!

Message me for a free consultation! Let’s simplify your accounting so you can build your business with confidence. ????

AIMS - Accountants for Business

T: 01902 927093

M: 07578347264

E: shahzad.younas@aims.co.uk

Submitted by Shahzad from AIMS Accountants
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