The Best Tax Tips for Startups & Small Businesses

So you’ve started your own company. You’ve decided on a legal structure (limited company, sole trader etc.) and registered with Companies House. You’ve got the logo, the staff and maybe your first few clients. You might have even sought the advice of a dedicated startup accountant. But just in case you haven’t or you there were things you never got round to talking over, here are some tax advice tips to help you through the difficult teething period:

File Accounts Electronically


These days it’s much simpler to do your bookkeeping digitally. All you need is a computer and the relevant software (and a bit of knowhow too but we’ll assume if you can start a business you’ll be fine at managing accounts). You’ll need to find HMRC accredited software that will allow you to file tax returns like the SA1000 for individuals included those who are self employed. A list of these can be found on the HMRC efiling section including Sage and Iris. In terms of payroll software, there are a number of free PAYE programs like RTI lite and KashflowPayrol for businesses with 9 or fewer employees.

Cycle to Work Scheme


Something you probably hadn’t considered: you can help your tax efficiency and your employees’ health by starting a cycle to work scheme. Part of the government’s Green Transport plan, businesses will receive tax breaks by selling or leasing bikes to their employees who will pay no VAT on their purchaser and employers can claim the bikes as tax-deductible expenditures. Employers can also pay employees who cycle to work a mileage rate of 20p per mile. If you were to cycle a 10-mile round trip every day that would amount to £520 over the year.

Know Your Dates

Consider the Flat Rate Scheme

Often seen as a confusing, the flat rate scheme can make things simpler for businesses whose turnover doesn’t exceed £150,000. It allows those businesses that qualify to make a flat-rate calculation based on their turnover rather than recording the VAT from every sale or purchase. As the name implies, there is no pressure to join but the incentive of less administration is enough to convince many. When your next VAT return is due you simply pay the flat-rate amount for your industry as a percentage of total turnover – for restaurants and takeaways it’s 12.5%, for retailing pharmaceuticals and medical goods it’s 8%. And once you’re signed up you can remain in the scheme until your turnover goes over £230,000.


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