To calculate your personal income tax on all your income for the year (6 April to 5 April) you must unfortunately fill out another form. A corporation tax return must be completed, with tax due for payment to HMRC within nine months and one day of the accounting period. Corporation taxĪll UK limited companies pay this, and the main rate is currently charged at 19 per cent on any profit generated that isn’t ring-fenced. The relevant accounts need to be completed before the following 31 January, to be used when completing your self-assessment tax return due on that date.įor limited companies you can more or less choose your accounting year to suit yourself and your business but you still need to complete and file accounts every year with Companies House. You can choose when your accounting year is to end, but since taxable income for sole traders is calculated on a 6 April to 5 April basis – and accounts are needed to back up the tax return – it makes sense for sole traders (and partnerships) to have an accounting year that runs from 1 April to 31 March. The due date for submitting accounts depends on whether you operate as a sole trader or a limited company. The yearly financial performance of your business must be presented in a formal record and in a prescribed format – this includes sales, costs, assets (things like stock or machinery or equipment) and amounts owed. There are a number of key providers in the space and they all offer slightly different features and pricing. If you are going to use software, it’s worth shopping around to find the perfect package for your business.
If you haven’t got the time to do it all yourself, you can hire someone to do it for you.ģ top picks of accounting software for small businesses Various tasks like dealing with invoices, recording expenses, monitoring outgoings and paying employees can be very time consuming. There is always a choice, so bookkeeping can be done manually or using cloud accounting software.
See also: Best UK small business accounting software – review
It takes time to get this right but if done correctly your business will be in a great position. On the flip side, getting it right from the start sets the tone for any business, resulting in higher earnings and greater success in the long run.You don’t need to be a maths wiz to successfully prepare and manage your accounts as a small business, all you need is a basic understanding of bookkeeping and finance. If your business’s numbers aren’t managed properly, you can create serious problems for yourself when it comes to managing taxes and cashflow. Yes, the first thing you should start putting things into place is the financials.
But it’s important not to do so at the expense of the less interesting but equally vital aspects of running a business, such as managing accounts…