Business Builder

Tackling tax for your business

Make tax returns less taxing

Most businesses will need to pay some form of taxes, but these will depend on whether you’re a sole trader, partnership or a limited company, and the size and type of your business.

Let’s get digital

  • Prepare to submit your return online – the government’s Making Tax Digital (MTD) scheme lets you use compatible software to manage your tax with HMRC. 
  • In the first phase, VAT-registered businesses were targeted and selected to keep digital records and file their returns online.
  • In the second phase income tax is the focus: HMRC has provided staggered MTD digital start dates from April 2026 for those registered for income tax self-assessment (ITSA) with a qualifying income of more than £50,000. 
  • There's more help on MTD for ITSA on the gov.uk website.

Be confident about going digital:

  • Choose suitable software – FreeAgent accounting software could help you track your annual tax bill and is free (optional add-ons may be chargeable) if you have a business current account with the bank.
  • File your online tax return early – you’ll know exactly how much tax you’re liable for and you can budget accordingly. Self-employed business owners such as sole traders or those in a partnership will need to fill in self-assessment tax return forms.
  • Don’t miss the deadlines – if you’re filing your tax return for the first time, bear in mind it could take up to 10 working days after registration to get the codes you need to continue.
  • Late payment of your taxes could lead to being charged interest and other penalties so it’s important to pay on time.

Sole traders and partners are typically liable for income tax and direct national insurance contributions.

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Limited companies and limited liability partnerships

Limited companies and limited liability partnerships are required to file returns to Companies House as well as to HMRC. A limited company is considered to be a legal entity and its financial information is visible to the public.

Find out what you need to file

For Companies House

  • Annual accounts: this is a legal requirement and usually includes items like a profit and loss statement and a balance sheet. Watch this video to see how to submit your accounts.
  • Confirmation statement: this gives a yearly snapshot of the company’s management and ownership and can be submitted via the HMRC website.
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  • A company tax return showing income, expenses and tax allowances. Note that the deadline to pay your corporation tax will differ from the date of the tax return.

Corporation tax is calculated on any profits made by limited companies based in the UK and includes allowances and reliefs. Other more common taxes are VAT (value added tax), due quarterly, if your annual turnover is over £85,000 and Employer’s National Insurance contributions, paid in respect of your employees’ wages.

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