How do I make sure my business is tax compliant?

Ensuring your business is tax compliant is crucial for long-term success and profitability. Ultimately, it means you’re paying the right amount of tax, which means neither underpaying nor overpaying tax, and keeping more of your hard-earned income in the business. This is a fundamental part of good governance and is a building block for growing your business.

We know it’s difficult to keep up to date with complex and evolving tax rules. But you don’t need to be an expert to get it right and a little guidance goes a long way.

Do I need to file a self-assessment tax return?

When it comes to tax filings, if you are self-employed you will need to report your profits to HM Revenue and Customs (HMRC) through a self-assessment tax return. Those affected include:

• sole traders
• partners in a business partnership, and
• company directors with untaxed income such as dividends.

This is not an exhaustive list so be sure to check the requirements here.

If you need to submit your own tax return, the information must be correct and complete. That means it’s very important to keep accurate records of your income and expenses throughout the year. Doing so should make the task quicker and less daunting.

What about corporation tax?

If your business is structured as a limited company, you need to register for corporation tax with HMRC within three months of beginning to trade. You must report and pay corporation tax on your company’s profits on a corporation tax return. The key dates to remember for limited companies are found here.

Do I need to register for VAT?

You will also need to register your business for VAT, if you are running a business that has turnover of more than £90,000 in the last 12 months, or if you expect it to go over £90,000 within the next 30 days. You will then need to charge VAT on sales and file a VAT return with HMRC. Usually you will need to file a VAT return every three months, unless you are in a specific VAT scheme. VAT registration is optional if your turnover is less than £90,000.

What are the benefits of registering for VAT?

One of the big benefits of registration is that if you have paid more VAT on costs (input VAT) than you have received from customers in sales (output VAT), you may receive a VAT repayment. So, if you know your business will be spending heavily one year, for example accumulating stock, it could be beneficial to register.

Being VAT registered can also help to boost the business’ credibility and sense of establishment. However, be aware that you will need to maintain detailed records, and there will be more administrative work. Your customers will also face higher costs unless they are VAT registered themselves. Learn more about your VAT obligations here.

While there is much to keep on top of, with the right support, it is very manageable. Our experienced accountants are here to help you get organised with your tax obligations.

What are the benefits of good record keeping for business owners?

Keeping accurate records throughout the year will make the process of completing your self-assessment tax return, corporation tax return and VAT returns easier, faster and less stressful. It will also mean you are paying the right amount of tax to HMRC because you are not having to rely on estimates. This reduces the risk of time-consuming HMRC enquires, penalties and interest costs and should put your mind at ease.

Modern bookkeeping bears little resemblance to the dusty leather-bound tomes of the past. There’s some great software out there that can help you to track and record expenses. Online and app-based solutions such as Xero, Dext and QuickBooks are efficient, easy to use and keep everything you need in one place.

Key items you should track and record include:

•  all goods and services bought and sold.
•  receipts for all your costs related to running the business including purchases, mileage and meals.

Remember to separate personal and business costs clearly.

Need help understanding what taxes you may need to pay?

Staying organised and tax compliant can seem daunting when you are a busy business owner, but it isn’t complicated with the right approach. We have years of experience in helping business owners take a proactive approach to tax. We can sit down with you to help you understand your obligations and identify where we can make your life easier. Once you have the right systems set up, your record keeping and tax filings can run seamlessly in the background, while you get on with running a successful and growing business.

To find out how TaxAssist Accountants can do more for you, call us today on 01753 971 440 or use our online contact form.

Last updated 13 Jun 2025 | First published 13 Jun 2025

Share

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

---