Your tax questions, answered

You usually need to file if you were self employed and earned more than £1,000, rented out property, had untaxed income, or are a higher earner. People with only PAYE wages and no other income often do not need to file. If you are not sure, our Self Assessment service can check your position for you.

A UTR is your Unique Taxpayer Reference, a 10 digit number that HMRC gives you when you register for Self Assessment. You need it to file your tax return and to pay any tax you owe. You can find out how to get one through our guide on how to register for Self Assessment.

You must register by 5 October after the end of the tax year, then file online and pay any tax due by 31 January. Paper returns have an earlier deadline of 31 October. See the full timeline on our page about Self Assessment deadlines and penalties.

Payments on account are advance payments towards your next tax bill, made if your last bill was more than £1,000. You pay two instalments, each half of the previous bill, due on 31 January and 31 July. Our tax calculators can help you estimate what these payments might be.

You get an automatic £100 penalty if you miss the 31 January deadline, even if you have no tax to pay. Further penalties and interest build up the longer you leave it. Read more about the charges on our page about Self Assessment deadlines and penalties.

For 2026/27 the personal allowance is £12,570, so most people pay no Income Tax on earnings up to that amount. Above this you pay 20% up to £50,270, then 40% up to £125,140. You can see how this affects you using our tax calculators.

The trading allowance lets you earn up to £1,000 from self employment or casual work each tax year without paying tax or filing a return for it. If you earn more, you can deduct the £1,000 instead of your actual costs, whichever suits you better. Our team can advise as part of our Self Assessment service.

A tax code tells your employer or pension provider how much tax free pay you are allowed before tax is deducted. The most common code for 2026/27 is 1257L, reflecting the £12,570 personal allowance. If your code looks wrong it can mean you pay too much or too little, and our Self Assessment service can help you check it.

You must register for VAT once your taxable turnover goes over £90,000 in any rolling 12 month period, or if you expect to pass it within the next 30 days. You can also register voluntarily below this if it suits your business. Our guide on when to register for VAT explains the timing in detail.

The VAT registration threshold for 2026/27 is £90,000 of taxable turnover, measured over a rolling 12 month period rather than a tax year. Once you cross it you have 30 days to register with HMRC. Learn more on our page about when to register for VAT.

The Flat Rate Scheme lets smaller VAT registered businesses pay a single fixed percentage of their turnover to HMRC instead of working out VAT on every sale and purchase. It can simplify your bookkeeping, though it is not always the cheapest option. See how it compares on our page about how the VAT Flat Rate Scheme works.

Most VAT registered businesses file a VAT return every three months and pay any VAT owed to HMRC. Returns must now be kept and submitted using compatible software under Making Tax Digital. Our VAT service can prepare and file these for you.

Sole trader is simpler to run, while a limited company can be more tax efficient and limits your personal liability once profits grow. The right choice depends on your profit level, your plans, and how you want to take money out. Compare both on our page about sole trader versus limited company.

For 2026/27 the first £500 of dividends is tax free, then you pay 8.75% as a basic rate taxpayer and 33.75% as a higher rate taxpayer. Dividends can only be paid out of company profits after corporation tax. See how to balance them with salary on our page about salary versus dividends.

For 2026/27 corporation tax is 19% on profits up to £50,000 and 25% on profits of £250,000 or more, with marginal relief easing the rate in between. It is charged on your taxable profits for the accounting period. Our guide on how to pay corporation tax covers the deadlines and how to pay.

A CT600 is the company tax return that a limited company files with HMRC to report its profits and work out corporation tax. It is filed alongside your accounts and tax computations after your year end. Our limited company accounts service can prepare and file it for you.

A confirmation statement is a yearly filing to Companies House that confirms your company details such as directors, shareholders, and registered office are up to date. It is separate from your accounts and your tax return. Our limited company accounts service can keep this and your other filings on track.

Most directors take a mix of a small salary through payroll and dividends from company profits, which is often the most tax efficient approach. The best split depends on your profits and personal income. Our guide on how directors pay themselves walks through the options.

A directors loan account records money you take out of or put into the company that is not salary, dividends, or expenses. If you owe the company money at the year end, the company may face section 455 tax at 33.75% until it is repaid. Read more on our page about the directors loan account explained.

You can pay a spouse or family member if they genuinely work in the business and the pay is reasonable for the work they do. The amount must reflect real duties, otherwise HMRC may challenge it. Our team can set this up correctly as part of our payroll service.

A P60 is the summary of your total pay and the tax deducted over the whole tax year, given to you by your employer after 5 April. You may need it to claim a refund, apply for a loan, or complete a tax return. Our payroll service produces P60s for your employees each year.

A P45 is the form you receive when you leave a job, showing your pay and tax so far in the tax year. You give it to your next employer so they use the right tax code. Our payroll service handles P45s for staff who join or leave.

A P11D reports benefits in kind that employees or directors receive on top of their salary, such as a company car or private medical cover. It is filed with HMRC after the tax year so the right tax and National Insurance can be applied. Our payroll service can prepare these for you.

RTI, or Real Time Information, means employers report pay and deductions to HMRC each time staff are paid rather than once a year. This keeps tax records up to date throughout the year. Our payroll service handles all your RTI submissions on time.

Under the Construction Industry Scheme, contractors deduct 20% from registered subcontractors on the labour part of their invoices and pay it to HMRC. The deduction does not apply to materials. Our team can manage your CIS through our payroll service.

Many subcontractors have 20% taken off their pay under CIS, which often adds up to more tax than they actually owe once the personal allowance and expenses are counted. The overpaid amount comes back as a refund after your tax return. Find out how on our page about how to claim a CIS refund.

Making Tax Digital, or MTD, is an HMRC plan to move tax record keeping and filing online using compatible software. It already applies to VAT and is being extended to Income Tax. Our page on Making Tax Digital explained sets out what it means for you.

MTD for Income Tax begins in April 2026 for self employed people and landlords with income over £50,000, then in April 2027 for those over £30,000. You will keep digital records and send quarterly updates to HMRC. Read more on our page on Making Tax Digital explained.

You will need software that can keep digital records and connect to HMRC to send your updates and returns. Spreadsheets alone are not enough unless linked through bridging software. Our bookkeeping service can set you up with the right tools.

Yes, VAT registered businesses must already keep digital records and file VAT returns through compatible software under Making Tax Digital. This has applied to all VAT registered businesses for some time. Our VAT service keeps you fully compliant.

Under MTD for Income Tax you will send a summary of your income and expenses to HMRC every three months, followed by a final declaration after the year end. These updates replace the old once a year way of reporting. Our page on Making Tax Digital explained covers what to expect.

You can usually claim the business portion of your phone bill as an allowable expense. If you use the same phone for personal calls too, you claim only the share that relates to work. Our guide to what you can claim explains how to work out the split.

If you use your own vehicle for business you can claim 45p per mile for the first 10,000 miles in the tax year, then 25p per mile after that. Keep a record of your business journeys to support the claim. See more in our expenses library.

If you work from home you can claim a share of your household running costs, or use the simplified flat rate from HMRC instead. The flat rate is easier but the actual cost method can sometimes be higher. Our guide to allowable expenses shows both approaches.

If you are self employed you should keep your business records for at least 5 years after the 31 January filing deadline, while companies must keep theirs for 6 years from the end of the accounting period. Records include invoices, receipts, and bank statements. Our bookkeeping service can keep everything organised for you.

You are not legally required to have an accountant, but a good one saves you time, helps you avoid penalties, and often finds savings that cover the cost. It is especially worthwhile once you are self employed, VAT registered, or running a company. You can talk it through when you book a call with us.

You register with HMRC for Self Assessment once you start working for yourself, and the deadline is 5 October after the end of your first tax year of trading. HMRC then issues your UTR so you can file. Our guide on how to register for Self Assessment takes you through each step.

Switching is straightforward, as your new accountant contacts your old one for your records and authorisation under a professional clearance process. There is usually very little for you to do. The easiest first step is to book a call so we can get you set up.

If you are self employed you pay Class 4 National Insurance at 6% on profits between the lower and upper limits, then 2% above the upper limit, alongside your Income Tax. The exact amount depends on your profit for the year. You can get an estimate using our tax calculators.