Small business accounting, unpacked.
Practical guides on tax, VAT, payroll, bookkeeping, and cash flow — written for Harrow small businesses, sole traders, and limited companies.
Basis Period Reform and Your First MTD Filing Year
Basis period reform moved unincorporated businesses onto a tax-year basis from 2024/25, with transition profits from the 2023/24 changeover spread over five years to 2027/28. That spreading is still running into the first MTD for Income Tax year, so the two changes interact.
MTD for Income Tax Exemptions: Who Is Excluded and How to Apply
Some taxpayers are automatically outside MTD for Income Tax, including anyone with qualifying income of £20,000 or less. Others can apply for a digital exclusion exemption on grounds of age, health, disability, location or religious belief. Either way the income still has to be reported through Self Assessment.
How the MTD for Income Tax Penalty Points System Works
Under MTD for Income Tax a missed quarterly update earns one penalty point, and four points in a rolling window trigger a £200 charge. A first-year grace period covers the initial four updates for the April 2026 cohort, and late payment is penalised separately.
Pre-Trading Expenses: What a New Limited Company Can Deduct
A new UK limited company can deduct revenue costs it paid up to seven years before it started trading, treated as if they were incurred on the first day of trade. Capital spending qualifies for allowances from the same date, and VAT has its own separate recovery windows.
Salary or Dividends: How a Director Should Take Money From a Limited Company
A director of a small limited company chooses how to take money out, and the split between salary and dividends changes the total tax bill. Here is how the two routes work in 2026/27 and how they fit together.
How Do You Move From Spreadsheets to Cloud Accounting for MTD?
Making Tax Digital expects digital records kept in compatible software, which is pushing owner-managed businesses off spreadsheets. Here is how to move to the cloud without losing your history.
Carrying Corporation Tax Losses Forward or Back to Cut Your Bill
A UK trading loss can be carried back twelve months against earlier profits, carried forward against future profits, surrendered as group relief, or used as terminal loss relief on cessation, subject to the post-2017 deduction cap above £5 million of profit.
Micro-Entity Accounts (FRS 105): Simplified Reporting for Small Companies
FRS 105 lets very small UK companies report under a stripped-down framework, with no investment property fair-value option, no deferred tax, no cash flow statement and abridged filings at Companies House, provided they meet two of three size tests for two consecutive years.
Managing a Director's Loan Account and the Section 455 Tax Trap
An overdrawn director's loan account creates a section 455 charge at 35.75% if not repaid within nine months of the year-end, plus a beneficial-loan benefit-in-kind on balances over £10,000, with anti-avoidance rules blocking the old repay-and-redraw trick.
Filing Deadlines for Your CT600 and Annual Accounts
A limited company faces three core deadlines: corporation tax due 9 months and 1 day after period end, the CT600 due 12 months after, and annual accounts to Companies House 9 months after, plus a yearly confirmation statement.
How to Calculate Marginal Relief for Profits Between £50k and £250k
Marginal relief tapers UK corporation tax in the £50k to £250k band. It is calculated as the upper limit minus profit, multiplied by the standard 3/200 fraction, and subtracted from tax at 25%.
Understanding the 25% Main Rate and the 19% Small Profits Rate
UK corporation tax has run on two rates since April 2023: 19% on profits up to £50,000 and 25% on profits over £250,000. The limits divide across associated companies and pro-rate for short periods.
Best MTD Software for Sole Traders: Xero, QuickBooks and FreeAgent Compared
For UK owner-managed SMEs choosing MTD-compliant software in 2026, the practical shortlist is four: Xero, QuickBooks Online, FreeAgent, and Sage Business Cloud. The right choice depends on business size, integration needs, whether MTD VAT applies alongside ITSA, and whether the business banks with NatWest.
MTD for Income Tax: Quarterly Updates and the Final Declaration
MTD ITSA replaces the single annual return with four quarterly updates plus a year-end Final Declaration. The separate End of Period Statement was scrapped before go-live, so year-end adjustments now finalise through the Final Declaration.
MTD for Income Tax and the £50k Threshold: What Owner-Managers Must Check
The £50k MTD ITSA threshold for April 2026 applies to UK owner-managed sole traders (partnerships join on a later timetable). Limited companies sit outside MTD ITSA entirely. The threshold is gross qualifying income across self-employment and property combined, with no profit-based mitigation.
Accounting Tips for First Time Business Owners
Mastering core accounting principles like accrual versus cash basis ensures first-time business owners avoid costly compliance errors and optimise tax strategies. These principles form the foundation ...
HMRC Rules for Small Businesses
UK small businesses must register with HMRC within 3 months of starting trade, choosing between sole trader (simple setup, personal liability) or limited company structures based on liability protecti...
Funding Options for Small Businesses
Self-funding gives small businesses full control without debt or equity dilution. Many US startups begin this way. It avoids interest payments and investor demands.
Year End Accounts for Small Businesses
Year-end accounts transform raw financial data into actionable insights, enabling small businesses to assess performance, meet legal obligations, and plan for growth with statements like profit and lo...
Small Business Budgeting Guide
Mastering budget basics starts with distinguishing fixed costs like $2,500 monthly rent from variable costs like $1,200 in fluctuating utility bills. Fixed costs maintain stability, such as rent, sala...
Financial Mistakes Small Businesses Make
Cash flow mismanagement causes 82% of small business failures according to U.S. Bank study, yet simple forecasting tools can prevent this. Many business owners face cash flow problems from delayed rec...
How to Grow a Profitable Small Business
Validating your business idea requires systematic market research and customer analysis to ensure demand exists before investing time and money. Many startups fail because they build products without ...
Limited Company vs Sole Trader for Small Businesses
A sole trader is the simplest UK business structure where you operate as a self-employed individual, personally liable for all debts, with 2023/24 HMRC data showing 4.3 million active sole traders con...
Business Structure Choices in the UK
Sole trader status requires minimal setup via HMRC self-assessment registration within 3 months of trading start. No Companies House filing is needed, but personal liability applies to all debts. This...
Hiring an Accountant for Your Small Business
Small business owners often handle bookkeeping and tax preparation themselves to cut costs. Yet this approach risks errors in financial statements and missed deductions. Professional accountants bring...
Cash Flow Management for Small Businesses
Cash flow tracks actual money moving in and out of your business, distinct from profit which includes non-cash items like depreciation. The standard equation is Cash Flow = Operating Cash Flow + Inves...
Financial Planning for Small Businesses
Mastering financial basics equips small businesses with tools to track performance using three core statements: balance sheet, income statement, and cash flow statement. These statements help SMEs mon...
Accounting Software for Small Businesses
Small businesses using accounting software reduce bookkeeping time by 70% and cut errors by 50%, according to a 2023 Intuit study of 5,000 SMBs. This shift frees owners to focus on growth rather than ...
VAT for Small Businesses Explained
VAT (Value Added Tax) is a consumption tax levied on the value added to goods and services at each stage of production or distribution, collected by HMRC in the UK and similar authorities worldwide. U...
Small Business Bookkeeping Guide
Mastering bookkeeping basics saves small businesses time and reduces errors in tax preparation. Bookkeeping forms the foundation of financial health for any small business. It tracks revenue, expenses...
Accounting Basics for Small Businesses in Harrow
Mastering accounting principles like double-entry bookkeeping ensures accurate financial records for small businesses in Harrow. This system balances every transaction with equal debits and credits, m...