We’ve covered most the questions our clients ask us below, but if there is anything else you would like to know please do get in touch.
individuals
A sole trader is a self-employed individual who runs their business personally. You keep all the profits after tax, but you are personally responsible for any business debts or liabilities.
You’re not legally required to use an accountant, but many sole traders do to ensure their tax returns are accurate, deadlines are met, and all allowable expenses are claimed.
An accountant can also help reduce your tax bill and save you time.
Sole traders pay:
- Income Tax on business profits
- Class 2 and Class 4 National Insurance
Tax is usually paid through the Self Assessment system.
You must keep accurate records of:
- Sales invoices
- Business expenses and receipts
- Bank statements
Good record-keeping helps ensure your tax return is correct and reduces the risk of HMRC enquiries.
Making Tax Digital is HMRC’s move towards digital tax reporting. Many sole traders are now required to keep digital records and submit information using compatible software.
We can help you stay compliant and set up the right systems.
Your Self Assessment tax return must be submitted by:
- 31 January (online return)
The tax owed is usually due by 31 January, with possible payments on account.
Yes. We can register you with HMRC as a sole trader, set up your bookkeeping, and guide you through what you need to do in your first year of trading.
Missing deadlines can result in penalties and interest from HMRC.
Using an accountant helps ensure everything is filed on time and correctly.
We offer clear, fixed-fee packages for sole traders, tailored to your income level and the support you need, with no hidden costs.
If you work for yourself and invoice customers directly, you’re usually a sole trader. This is very common in the trades.
If you work in construction, CIS may apply. We can:
- Register you for CIS
- Submit monthly CIS returns
- Make sure tax deductions are handled correctly
companies
While it’s not a legal requirement, most limited companies use an accountant to ensure compliance with HMRC and Companies House, minimise tax liabilities, and save time.
An accountant can also provide valuable advice as your business grows.
- A limited company must prepare:
- Annual statutory accounts for Companies House
- Corporation Tax returns for HMRC
- Annual Confirmation Statement
- Payroll and dividend records
- VAT Returns
Limited companies typically pay:
- Corporation Tax on company profits
- PAYE and National Insurance if directors or staff are paid a salary
- VAT if registered
Directors may also pay Income Tax on salaries and dividends received.
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Directors are usually paid through a combination of salary and dividends. This structure can be tax-efficient when set up correctly, and we can advise on the most suitable approach for your circumstances.
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You must register for VAT if your taxable turnover exceeds the VAT threshold (Currently £90,000). Some businesses choose to register voluntarily.
We can advise on whether VAT registration is beneficial and which VAT scheme is most suitable.
You must keep accurate records of:
- Sales invoices
- Business expenses receipts
- Bank statements
Good record-keeping helps ensure your tax return is correct and reduces the risk of HMRC enquiries.
As a director, you are responsible for:
- Keeping accurate accounting records
- Filing accounts and tax returns on time
- Acting in the best interests of the company
We help ensure you meet these obligations and avoid penalties.
Late filings can result in penalties, interest, and potential compliance issues with HMRC or Companies House. Using an accountant significantly reduces the risk of missed deadlines.
Absolutely! We can assist with company formation, registrations with HMRC, setting up payroll, and providing ongoing support from day one.
Fees vary depending on the size and complexity of the business and the level of support required. We offer clear, fixed-fee packages with no hidden costs.
Many contractors choose to work through a limited company due to the flexibility and potential tax efficiency it can offer. However, this depends on your contract terms, income level, and personal circumstances. We can advise whether a limited company is the right option.
IR35 is legislation designed to determine whether a contractor is genuinely self-employed or effectively an employee for tax purposes.
If a contract falls inside IR35, your income is taxed similarly to employment. If it’s outside IR35, you may pay yourself through a mix of salary and dividends. We provide guidance on IR35 status and contract reviews.
