Frequently Asked Questions

The main differences between operating as a sole trader and a limited company come down to legal structure, tax, and liability.

Sole Trader:

• You and your business are legally one and the same
• You’re personally responsible for all business debts
• You keep all profits after tax
• Simpler to set up and run with less paperwork
• You pay Income Tax and National Insurance on all profits through Self Assessment

Limited Company:

• Your business is a separate legal entity from you personally
• Your personal assets are usually protected if the business has debts (limited liability)
• The company owns its profits and assets, not you personally
• More complex with legal obligations including filing annual accounts with Companies House
• The company pays Corporation Tax (19-25% depending on profits), and you pay tax on what you take out as salary or dividends
• More tax-efficient at higher profit levels

Which is right for you?

Sole trader status works well if you’re starting out, have lower profits, or want to keep things simple. A limited company often makes sense if you’re earning higher profits, want to protect personal assets, or plan to grow significantly. Many business owners start as sole traders and incorporate later as their business grows, which we can help you with.

We’re happy to discuss your specific circumstances to help you decide which structure suits your needs best.

Registering as a sole trader in the UK is straightforward and can be done online.

The process:

1. Register with HMRC for Self Assessment
You need to register by 5th October in your business’s second tax year (tax years run from 6th April to 5th April). For example, if you start trading in July, you must register by 5th October. However, we recommend registering as soon as you start trading to avoid penalties.

2. Go online
Visit the HMRC website and register for Self Assessment as a sole trader using this link – https://www.gov.uk/self-assessment-tax-returns/registering.
You’ll need your National Insurance number, identification and contact details.

3. Choose a business name (optional)
You can trade under your own name or choose a business name. If you choose a business name, it must be displayed on all business documents and correspondence.

4. Get your Unique Taxpayer Reference (UTR)
HMRC will send you a UTR number in the post within about 10 days. You’ll need this for your tax returns.

Setting up a limited company involves registering with Companies House and HMRC. Here’s what you need to know:

What you’ll need:

• A company name (must be unique and follow naming rules)
• A registered office address in the UK (this becomes public)
• At least one director (aged 16 or over)
• At least one shareholder (can be the same person as the director)
• Details of shares and shareholders
• Memorandum and Articles of Association (standard templates are available)
• A SIC code describing what your company does
• All new directors must have their identify verified, more information here https://www.gov.uk/guidance/verify-your-identity-for-companies-house. This is a service we provide also to help with verification.

The registration process:

1. Check your company name is available
Search the Companies House register to ensure your chosen name isn’t already taken.

2. Register online with Companies House
You can do this yourself or use a formation agent or accountant.

3. Receive your certificate of incorporation
Usually within 24 hours for online applications. This confirms your company legally exists.

4. Register for Corporation Tax
You must tell HMRC within 3 months of starting business activity. You’ll receive a Unique Taxpayer Reference (UTR).

5. Set up a business bank account
Most banks require your certificate of incorporation and proof of identity.

Ongoing responsibilities:

Once registered, you’ll need to file annual accounts with Companies House, submit Corporation Tax returns to HMRC, maintain statutory registers, and file a Confirmation Statement each year.

We can help:

We offer company formation services that handle all the paperwork and ensure you’re set up correctly from day one. We’ll also guide you through your ongoing compliance obligations so nothing gets missed.

The short answer: It’s not legally required, but for most small businesses and especially limited companies, having an accountant is a valuable investment.

For sole traders:

You can legally prepare and file your own Self Assessment tax return. However, we can help:

• Ensure you claim all allowable expenses
• Plan for tax bills and avoid nasty surprises
• Keep you compliant with HMRC rules and deadlines
• Save you time and stress, letting you focus on your business
• Provide valuable business advice as you grow

For limited companies:

While you can technically do it yourself, the requirements are much more complex:

• Annual accounts must be prepared to specific accounting standards
• Corporation Tax calculations can be intricate
• Companies House and HMRC have strict filing deadlines with significant penalties for late filing
• Directors have legal responsibilities that require proper understanding
• Tax planning opportunities (salary vs dividends, expenses, allowances) can save thousands

We offer a free initial consultation to discuss your specific needs and explain exactly how we can help your business.

The ideal time to hire an accountant depends on your circumstances, but here are the key moments when businesses typically benefit most:

Before you start:

Getting advice before you start trading can save significant money and hassle. We can help you with:

• Choosing the right business structure (sole trader vs limited company)
• Understand your tax obligations from day one
• Set up proper accounting system with Xero so it is fully customised for your business and you are trained on how to use it
• Register correctly with HMRC and Companies House
• Plan for tax efficiency from the start

Switching accountants is straightforward and happens more often than you might think. If you’re not happy with your current service, changing is easier than staying frustrated.

Our process:

1. Initial consultation
2. Proposal agreed
3. We’ll write to your existing accountant
4. Onboarding

Your new accountant will typically handle notifying HMRC that they’re now your agent (with your permission).

Timing considerations:

• Try to switch between busy periods (avoid January if possible, as this is peak tax return season)
• Give yourself time before major deadlines
• Mid-year switches are often smoothest

Why people switch:

• Poor communication or slow responses
• Lack of proactive advice
• Errors or missed deadlines
• Fees don’t match value provided
• Business has grown and needs more sophisticated service
• Simply not a good personal fit

Our promise:

We make switching to us as smooth as possible. We’ll handle all the administrative work, coordinate with your previous accountant, and ensure there’s no disruption to your compliance or deadlines. Many of our clients are people who switched from other firms, and they often say they wish they’d done it sooner.

If you’re considering a change, let’s have a conversation about what you need and how we can help.

Yes, we work with both sole traders and limited companies across all stages of business growth.

Our services for sole traders include:

• Self Assessment tax return preparation and filing
• Tax planning and advice to minimise your tax liability
• Bookkeeping and record-keeping support
• VAT registration and returns
• Tax planning
• HMRC correspondence and enquiry support

Our services for limited companies include:

• Annual accounts preparation and filing with Companies House
• Corporation Tax returns and compliance
• Director salary and dividend planning for tax efficiency
• Company formation and setup
• Payroll services
• VAT returns and Making Tax Digital compliance
• Management accounts and business insights
• Confirmation Statement filing

We also support businesses transitioning from sole trader to limited company status, making the switch as smooth as possible. Whether you’re just starting out or have been trading for years, we tailor our services to match your specific needs and stage of growth.

While we work with businesses across many different industries, we have particular expertise in several key sectors.

Our sector experience includes:

• Professional services (consultants, coaches, freelancers)
• Creative industries (designers, digital agencies)
• Technology and IT services
• Trade and construction businesses
• E-commerce and online retailers
• Property and landlords
• Agricultural
• Hospitality and catering

Our core accounting expertise applies across all sectors. Even if your industry isn’t listed above, we’re confident we can provide excellent service. During our initial consultation, we’ll discuss your specific industry needs and explain how our experience can benefit your business.

We primarily use and strongly recommend Xero for all our clients, though we can work with other cloud-based systems if you already have a preference.

Why we recommend Xero:

• Easy to use
• Cloud-based access from anywhere, anytime, on any device
• Real-time collaboration between you and us
• Automatic bank feeds that save time on data entry
• Making Tax Digital (MTD) compliant
• Easy invoice creation and tracking
• Expense claim management with receipt capture via mobile app
• Integration with hundreds of other business apps
• User-friendly interface that’s easy to learn

Our Xero setup service includes:

• Full software setup customised for your business
• Chart of accounts configured to your needs
• Bank feed connections
• Training on how to use the system effectively
• Ongoing support and guidance
• Migration from existing systems if needed

Other software we support:

We can also work with QuickBooks Online and Sage if you’re already using these platforms. However, for new clients and those looking to upgrade, we typically recommend Xero for its balance of functionality, ease of use, and value for money.

During your initial consultation, we’ll discuss which software solution best fits your business needs and budget.

Yes, absolutely. We believe strong client relationships are built on consistency and familiarity, so every client is assigned a dedicated accountant as their main point of contact.

What this means for you:

• You’ll work with the same person who gets to know your business inside and out
• No need to re-explain your situation each time you get in touch
• Your accountant will proactively reach out about deadlines, tax planning opportunities, and relevant changes
• Direct phone number and email for your dedicated contact
• Typically respond within one working day to queries
• Regular check-ins throughout the year, not just at tax return time

Team support when needed:

While you’ll have a dedicated accountant, they’re backed by our full team. This means:

• Continuous service even when your accountant is on holiday or unwell
• Access to specialist expertise when needed (e.g., complex tax issues, R&D claims)
• Quality assurance through peer review of important work
• Fast turnaround during busy periods like tax season

We’re not a call centre where you speak to a different person each time. You’ll build a genuine working relationship with someone who cares about your business success and is invested in helping you achieve your goals.

Yes, we handle all HMRC correspondence and communications on your behalf as your authorised agent.

What this includes:

• Registering as your agent with HMRC so we can act on your behalf
• Responding to all HMRC letters and correspondence
• Dealing with tax enquiries and investigations
• Negotiating payment plans if you’re struggling with tax bills
• Challenging penalties and appealing decisions where appropriate
• Handling VAT inspections and compliance visits
• Submitting all returns, declarations and forms on your behalf
• Clarifying tax codes and sorting PAYE issues

Why this matters:

Dealing with HMRC can be stressful and time-consuming. You might receive letters that are confusing or worrying, requests for information you’re not sure how to provide, or notices about penalties you don’t understand.

Having us handle HMRC matters means:

• You don’t have to navigate complex tax language and procedures
• Responses are technically correct and protect your position
• Issues are resolved faster with professional representation
• You avoid costly mistakes or admissions
• Peace of mind knowing an expert is handling it

Tax planning is at the heart of what we do. Unlike accountants who simply prepare your tax return based on what’s already happened, we work proactively throughout the year to minimise your tax liability and plan ahead.

Our 30-point tax planning checklist:

Every client benefits from our comprehensive 30-point tax planning checklist. We review your circumstances against this checklist to identify opportunities to reduce your tax bill. This covers everything from salary and dividend optimisation to capital allowances, expense planning, and tax-efficient timing of transactions.

Year-end tax planning meetings:

Because we use Xero with our clients, we have real-time visibility of your financial position throughout the year. Typically 9-10 months into your financial year, we’ll arrange a meeting to:

• Review your current financial performance
• Estimate your personal tax and Corporation Tax liability for the year
• Give you advance notice of what tax you will owe and when
• Identify tax planning opportunities before your year-end
• Discuss steps you can take to reduce your tax bill
• Help you budget and plan for upcoming tax payments

This proactive approach means no surprises. You will know what’s coming, have time to set money aside, and can take action to legitimately reduce your tax before it’s too late.

Typical tax planning strategies we help with:

• Optimising salary vs dividend mix for limited company directors
• Maximising tax-deductible business expenses
• Capital allowances on equipment and vehicles
• Timing of income and expenditure to manage tax efficiently
• Pension contributions for tax relief
• Incorporation planning (switching from sole trader to limited company)
• Use of tax reliefs and allowances
• Spouse/family income splitting where appropriate
• Capital gains tax planning for asset disposals

Year-round support:

Tax planning is not just an annual exercise. Throughout the year, we are available to advise on tax implications of business decisions you are considering – whether that is hiring staff, making significant purchases, or any other major financial decision.

The difference it makes:

Our proactive tax planning approach means you can make informed decisions about your business finances with confidence. You will have clarity on your tax position, time to prepare for payments, and peace of mind knowing you are getting a holistic review on your specific tax requirements.

We offer transparent, fixed-fee pricing so you know exactly what you’ll pay with no surprises. Our clients prefer our monthly payment plans which spread the cost evenly throughout the year.

We collect our fees on the first day of the month through GoCardless.

Our pricing approach:

• Fixed fees agreed upfront based on your specific needs
• Monthly payment options to help with cash flow
• Annual payment option if you prefer (often with a small discount)
• No hourly billing – unlimited email and phone support included
• Clear breakdown of what’s included in your package
• No hidden fees or unexpected charges

Typical packages include – copy from other packages

Benefits of monthly pricing:

• Easier to budget – same amount each month
• Spreads the cost of your annual work
• Encourages year-round communication rather than just once a year
• All monthly fees are allowable business expenses

Getting a quote:

Every business is different, so we provide personalised quotes based on your specific circumstances. During a free initial consultation, we’ll discuss your needs and provide a clear, written fee proposal. You’ll know exactly what you’re getting and what it costs before committing to anything.

Yes, we provide comprehensive VAT services including registration, return preparation, Making Tax Digital compliance, and advice on the most tax-efficient VAT schemes for your business.

Our VAT services include:

• VAT registration when you reach or approach the threshold (currently £90,000)
• Voluntary VAT registration advice if beneficial for your business
• Quarterly or monthly VAT return preparation and submission
• Making Tax Digital (MTD) compliance using Xero or compatible software
• Advice on which VAT scheme suits your business best
• Support with VAT inspections and enquiries
• Reviewing and correcting historical VAT errors
• VAT training for you and your team

VAT schemes we can help with:

• Standard VAT – Best for most businesses, especially if you claim significant VAT on purchases
• Flat Rate Scheme – Simplified scheme that can save time and money for businesses with low expenses
• Cash Accounting Scheme – Only pay VAT when customers pay you (good for cash flow)
• Annual Accounting Scheme – Make advance payments and only file one return per year

Making Tax Digital (MTD) for VAT:

All VAT-registered businesses must now comply with Making Tax Digital requirements. This means:

• Keeping digital records using compatible software
• Submitting VAT returns digitally through the software
• Maintaining a digital link between your records and submissions

We ensure you’re fully MTD compliant using Xero, which seamlessly integrates with HMRC’s systems. We’ll handle all the technical setup and submission so you don’t need to worry about the requirements.

How it works:

We typically work with you on a quarterly basis. You keep your records up to date in Xero (or we do this for you if you’ve opted for our bookkeeping service), and we prepare and submit your VAT return before the deadline. You’ll always know what you owe in advance, with no last-minute surprises.

Yes, we provide comprehensive payroll services for businesses of all sizes, from single directors to companies with multiple employees. We handle everything so you can focus on running your business.

Our payroll service includes:

• Monthly or weekly payroll processing
• PAYE and National Insurance calculations
• Real Time Information (RTI) submissions to HMRC
• Payslips for all employees
• P60s at year-end
• P45s for leavers
• P11D preparation and submission for benefits and expenses
• Auto-enrolment pension administration
• Employer pension contributions processing
• Statutory payment calculations (sick pay, maternity/paternity pay)
• Student loan deductions
• Attachment of earnings orders
• Year-end reporting and filing

How it works:

Each pay period, you send us details of hours worked, any changes (new starters, leavers, pay rises), and any expenses or benefits. We process the payroll, submit the information to HMRC in real-time, and provide you with:

• Payslips for each employee
• A payroll summary showing total costs
• What to pay HMRC and when
• Bank payment file if required
• Pension contribution amounts

Auto-enrolment pensions:

We help you comply with auto-enrolment legislation, including assessing employees, setting up your pension scheme, calculating contributions, and submitting required information to your pension provider and The Pensions Regulator.

Director-only companies:

For limited companies with just directors and no other employees, we can process a simple director payroll as part of your year-end accounts package, or on a monthly basis if you prefer regular salary payments.

Pricing:

Our payroll fees are typically charged per employee per month. We’ll provide a clear quote based on your specific requirements including number of employees, pay frequency, and any additional complexity.

Whether you have one employee or fifty, we ensure your payroll is accurate, compliant, and delivered on time, every time.

Dext (www.dext.com) is a clever app that captures, processes, and organises your receipts and invoices automatically. We use it extensively with our clients because it saves significant time and makes bookkeeping much easier.

How Dext works:

• Take a photo of any receipt or invoice using your phone
• Email receipts and invoices directly to your Dext inbox
• Forward supplier invoices from your email
• Connect to your suppliers for automatic invoice fetching
• Dext extracts all the key information (date, amount, VAT, supplier)
• The data flows directly into Xero automatically
• Your receipts are stored digitally and searchable

Key benefits:

• Paperless expense records
• PCapture expenses on the go while they’re fresh in your mind
• PNever lose another receipt
• PSignificantly reduces data entry time
• PImproves accuracy – less manual typing means fewer errors
• PHMRC-compliant digital storage
• PSearch and find any receipt or invoice in seconds
• PAutomatic mileage tracking available
• PWorks seamlessly with Xero

Perfect for:

• Busy business owners who hate admin
• People who frequently lose receipts
• Businesses with lots of expenses
• Anyone who travels for work
• Companies preparing for Making Tax Digital
• Teams who need to submit expenses

Our Dext service:

We set up Dext for you, connect it to Xero, train you on how to use the app, and monitor the flow of receipts and invoices. If you prefer, we can review and publish your Dext items to Xero as part of our bookkeeping service, so you literally just snap photos and we do the rest.

Pricing:

Dext subscription costs are separate from our fees but are very affordable (typically £25+vat per month). It’s a tax-deductible business expense that often pays for itself many times over in time saved.

Most of our clients say Dext is a game-changer for managing their business expenses. Once you start using it, you’ll wonder how you ever managed without it!