You might even need to complete one if you’re employed – for example, because you get money from property which is separate to your employment income.

In this article, we’ll take a look at the different options available for sending a tax return, and also explore Making Tax Digital (MTD) Income Tax.

Filing your tax return using a paper form or online

There are different ways you can file your tax return and pay what you owe, including:

• Online
• Via paper form

Filing your tax return online is the most common method – and in some cases this is mandatory, especially with everything becoming digitalised. But in some cases you can still file a paper return.

When do I need to submit my tax return?

There’s often lots of noise around the deadline for submitting your online return (which is 31st January), but the deadline for submitting a paper return is earlier and must be received by HMRC by 31st October.

Do I need to register before I can send a tax return?

Yes, you’ll always need to register before sending a tax return.

If you’re a sole trader or partnership

If you’re a sole trader or part of a partnership, then the onus is on you to make sure you’re paying the correct amount of tax and National Insurance on your self-employed earnings.

The deadline to register for Self Assessment is 5th October in your second tax year of business.

Thankfully, sole traders can earn up to £1,000 tax-free before they need to register and start sending tax returns to HMRC. This is known as the trading allowance.

If you run a limited company

Limited companies, on the other hand, need to pay Corporation Tax.

Most choose to register for Corporation Tax when they first incorporate the business with Companies House. If you do decide to defer it then you’ll need to register for tax within 3 months of starting to trade.

Does the way I submit my tax return affect when I need to pay the bill?

It can, yes – because the kind of tax return you must send determines what kind of tax you owe and the deadline for paying it.

For example, if you need to complete a Self Assessment then the deadline for paying your bill is 31st January (following the tax year it relates to).

Corporation Tax must be paid by 9 months and 1 day after the end of your company’s accounting period.

Making Tax Digital (MTD)

Now, if you’re used to sending a Self Assessment to report self-employed or landlord income, Making Tax Digital is something you really need to familiarise yourself with – and possibly start preparing for.

In simple terms, it’s a government-led initiative to try and modernise the tax system, while also minimising mistakes in the process. It’s already been rolled out for all VAT-registered businesses, and now it’s being rolled out in phases for MTD Income Tax.

MTD IT will replace the traditional Self Assessment, so instead of an annual tax return you’ll send HMRC smaller, quarterly updates on MTD compatible software, followed by a ‘Final Submission’ by 31st January each year.

You’ll need to follow MTD IT rules by:

• April 2026 if you earn more than £50,000 from self-employment and/or property
• April 2027 for those earning more than £30,000 in the 2025/26 tax year
• And April 2028 for those earning £20,000 in the 2026/27 tax year

An accountant can help make sure you’re complying with the MTD rules, so don’t worry if you’re a bit confused!

What happens if I miss a payment to HMRC?

You’ll incur an automatic fine if you miss a payment, and it gets worse the longer you leave it. Interest is also charged on top of penalties for any late payments. So, if you can’t pay, get in touch with HMRC immediately – as you could prevent this by setting up a Time to Pay arrangement.

If you need help with any of this, don’t hesitate to hire an accountant who will be able to walk you through the process and ensure you’re operating in the most tax-efficient way possible.

 
Find more help in our online accounting hub, and learn more about how to find the right accountant for your business.

The post How to Complete a Tax Return appeared first on The Cheap Accountants.

Good accountants can be used as a key tool for growing your business, so here are our top five ways to get the most from them.

Give them the right information

In an ideal world your accountant would follow you around, recording and considering all of your financial transactions and advising you of the tax implications.

Fortunately, accountants generally don’t have the time or desire to stalk their clients 24 hours a day. Unfortunately, they depend on you to give them a complete and accurate summary of your financial year!

A good accountant can usually draw out the relevant information with some basic questions, but the more effort you put into the basics, the less time you’ll have to spend on getting what you actually came for – an informed opinion on how you did with your finances from a tax perspective, and advice on how to minimise your taxes going forward.

So in simple terms, your first step in getting the most out of your accountant is to create an accurate and concise snapshot of your finances.

Tap into their networks

>As a small business, it is likely that the accountant you’re using is also working for a host of other businesses. Ask your accountant if they’re willing to initiate networking opportunities between you and other clients. This could lead to business deals, partnerships or a support network of people facing the same problems as you.

Value their advice

Your accountant will have expert knowledge of not only your business but of others like it. This means they can help you uncover ways of expanding your business and reducing your costs, as well as indicating areas where you need to spend more. It’s likely that any problem you face will be familiar to an experienced accountant, so they will most likely know how to solve it. Trust them!

Never lie!

Doctors can save your life, lawyers can save your freedom and accountants can save your livelihood, so always tell them the truth. Accountants need to know every fact about your business so they can work out how much tax you pay and how your business can make the maximum amount of profit. If you lie to them about your finances, this could lead to mistakes in your bookkeeping and possibly even the downfall of your business.

Arrange regular catch ups

Accountants usually have a large number of clients, meaning you can’t rely on them to contact you all the time. You should arrange to have monthly meetings or weekly phone calls with them, allowing you to discuss any problems or ask any questions. If you delay speaking to them and then dump all of your difficulties on them at the end of the tax year, problems may escalate and cause a last minute panic.

 
Check out our accounting support hub for more help and resources, or to ask a tax question.

The post Five Ways to Get The Most From Your Accountant appeared first on The Cheap Accountants.

What does tax avoidance look like?

This can vary, but it can include things like using complex company structures to separate businesses which would otherwise be linked. This can help a company or group of companies minimise tax by moving profits around or sharing losses.

There are other tactics too, such as disguising income by labelling it as a ‘loan’, and then the other company simply writing it off (which again is good for its own tax bill).

The danger of tax avoidance schemes

It can be difficult to know whether you’re getting good tax advice or being encouraged to join an avoidance scheme! Unfortunately, the result of joining such a scheme may leave you facing HMRC and result in you receiving a much larger bill – with penalties and all manner of legal trouble.

There are some indicators of tax avoidance routes that you should look out for, such as:

• The tax savings seem to good to be true, and it’s suggested you could earn a great deal without paying much tax at all
• The route your payments take to reach you seem extremely complex, and might go through multiple accounts, or multiple companies
• There are charges for joining the scheme, or the scheme has charges that are payable up front
• Transactions are labelled as ‘loans’ or something else which doesn’t reflect their actual nature
• Sales-like tactics to drive urgency for joining – “don’t miss out”

Practical tips for dealing with tax avoidance schemes

The first step is to hit pause! Some schemes are listed by HMRC as ones to avoid (which is ironic, considering they’re involved in tax avoidance), so it’s worth starting there.

It’s also useful to ask yourself if the scheme’s selling points make any real sense in terms of tax law. There are lots of tax allowances and relief schemes which are perfectly legitimite, but the promise of earning many thousands of pounds without paying tax should often be a red flag. You could ask the scheme provider to supply more information, or even the legislation which makes it acceptable.

HMRC and avoidance

HMRC take a very dim view of organised tax avoidance if it’s not in the spirit of the legislation. Some loopholes, such as diguised working, have been closed with the introduction of new rules (IR35 in this case) and this makes the tax system more secure.

Avoidance costs the compliant majority around £5 billion a year, and HMRC is constantly introducing tough new measures to tackle it. If you are unsure about a scheme, or want to find out more about legitimate tax planning, consult a reputable tax adviser.

Check your tax advisor is qualified

The term ‘accountant’ isn’t a protected title in the UK, so anyone can refer to themself as one – which is why it’s crucial to check they’re appropriately qualified!

The post What is Tax Avoidance? appeared first on The Cheap Accountants.

Is it worth hiring an accountant?

Building a new business from the ground up isn’t easy and requires a business plan, patience and hard work. All fun stuff! In the early stages of building a business, any spare money is likely a miracle which then gets channeled into something else because hiring an accountant is not at the top of everyone’s priority list, but maybe it should be?

Using their knowledge and experience

Knowing what is claimable and making your money work for you is crucial for any start up business wanting to grow and find stability, and this is where an accountant can be extremely useful.

Add to that the fact few people have experience of dealing with HMRC; in fact most new small businesses are setup by people who have been in permanent employment most of their working lives, so it’s a steep learning curve. Managing that experience can be much easier with an accountant on board.

Finding a cheap accountant

So where do you start? This all depends on your own needs and preferences. It’s time for some research!

Some accountancy firms operate purely online, offering a low cost accountant service online. The services are mainly targeted at small businesses and offer a full range of accountant services at affordable prices.

Just because someone offers their services as ‘cheap accountants’ doesn’t mean that the quality of services will be low. The fact that most cheap accountants are online based gives them the ability to reduce their costs to businesses because they haven’t got the overhead costs of a firm paying high-street rates for their offices.

Another advantage to hiring an online accountant is the fact your search is not limited to a local search. Your choice is spread across the UK. You could be working in Devon, but using an accountant in Birmingham because everything is done online and all communications are across email, phone and mail.

Bringing an accountant on board to your new business makes sense and will help you build a platform on which to grow. It will free up time that might be spent on bookkeeping for you to focus on bringing in new business or promoting your services. Start getting quotes and see who fits within your budgets and what services they offer.

 
Find more help in our online accounting hub, and learn more about how to find the right accountant for your business.

The post Cheap Accountants for your Small Business appeared first on The Cheap Accountants.

Registration for VAT

A business must register for VAT when its turnover in any 12 month period reaches the registration threshold, which is currently £90,000. It is possible to register on a voluntary basis, as this can sometimes be beneficial to the business. For instance, early registration means a business which pays more VAT on purchases than it collects on sales is able to reclaim the difference.

Rate of VAT

There are three rates of VAT – zero, standard and reduced. The standard rate is 20 per cent, while the reduced rate is five per cent. The most commonly used rate is the standard, which is applied to most of the services and goods in the UK.

There are some goods and services that are zero-rated, including food other than hot food in a takeaway or restaurant meals. Other zero-rated items include clothes and shoes for children, newspapers and books, and public transport, along with other items.

The reduced rate is applied to car seats for children, sanitary hygiene products, and fuel and power for domestic use. There are many other items that attract a reduced rate of VAT. Check out HMRC’s guide to different VAT rates, and when to use them.

VAT exemption

There are some goods and services that are exempt from VAT altogether. Among those are insurance services, the provision of credit, education, and most of the services provided by dentists or doctors.

What’s the difference between exempt and zero-rated?

There is a difference between zero-rated and exempt items, although the rate for both is effectively zero. If a registered company sells zero-rated services or goods, it can’t charge any VAT but it can claim back the VAT which it has paid on its expenses. If goods are exempt, no VAT is charged but the company is unable to claim back anything paid on the expenses.

How do I report VAT?

Businesses which are VAT registered must complete a VAT return on a regular basis. This tells HMRC how much VAT you have charged on sales, and how much you have paid on your purchases. This helps them work out whether you need to pay the difference to them, or reclaim it.

Get an instant quote for accounting support with your VAT return, or ask an accountant a free tax question.

The post An Introduction to VAT appeared first on The Cheap Accountants.

Regardless of the industry that you are in, detailed planning and the right perspective for your business is vital for growing in a sustainable way. We have put together a list of steps you can take to manage your small business in a sustainable manner.

Business growth

To a certain degree you can plan for the growth of your small business and work out how to manage it when the time comes. However, no one is ever quite sure when that growth will happen. For this reason, it helps to have a few ‘what-if’ scenarios that you can turn to when an exciting growth opportunity arises.

You can start by identifying some key indicators that will help you to determine when a surge in growth is happening. An increase in sign-ups for your services or a surge in sales is an obvious indicator but what about all of the things that lead to that increase? Are you receiving more interest on social media, is there a news article about your company, exposure at a conference? Having a baseline of numbers will help to ensure that your systems can handle your growth.

Customer focus

As you start to see your business grow it can be easy to get even more controlling over what happens and you begin to take your responsibility to your customer’s demands even more seriously. However, perspective matters. Your business isn’t all about you – a surge in customer demand may mean you’re not able to run it the way you would like to. You may lose some of that control, and for a period of time flexibility and the right attitude towards customers is vital.

Be realistic

In some cases you may have to turn down business opportunities because your business is currently unable to meet the increased demand. It does not mean that your small business is a failure, it is simply confirmation that the demand is out there when you are ready to handle it in a sustainable and smart way. Be confident and when necessary take the decision to step back and plan properly to meet the demand and move forward.

We’d love to hear what your small business success stories are! Please like and share this article if you found it useful.

The post Managing your Small Business Success appeared first on The Cheap Accountants.

We get that running a small business is not easy. As a small business owner it can sometimes be difficult to get things done. In order to see results that benefit your business we have compiled a list of time-saving tips!

Prioritise 

The key to prioritizing your daily tasks is to write them down in a list and rank them in order of importance. By doing this you will be completing each task in order of importance and urgency allowing you to stay on top of your workload.

Delegate

Are there other people who can do certain tasks, such as admin? Delegation allows you to remove yourself from the “noise” of the business and allows you to take a step back and think about the overall strategy and vision that you had when you first started the business.

Find a Freelancer!

Instead of dedicating part of your team to market research why not invest in the services of an external freelancer? Using specialist freelancers will ensure you have experience and dedicated professionals focused on the specialist tasks. This will provide you extra time to your principle operations, saving you both time and money.

Compare prices

Price comparison websites are a great tool for finding the best deals on things such as insurance, appliances, courier services and many more. By comparing prices it could significantly reduce the day-to-day costs of operating a business, allowing you to increase profit margins or price your services more competitively.

Go to the cloud

By moving business processes to internet-based services instead of running them on site, such as payroll and bookkeeping you will not only have greater access from wherever you are and whenever you need it, but you will also reduce the time spent on such tasks.

We would like to hear what tips you have for saving time whilst running your small business! Or if you liked our article then please like and share it.

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