For many entrepreneurs, accounting feels like the most complicated part of starting up. But financial literacy doesn’t require a degree—it requires understanding a few core terms and knowing when to call in a professional. Getting your books right ensures compliance and gives you the vital data needed to make smart, profitable growth decisions (a foundation for both your [Building a Business Plan] and [Choosing the Right Business Structure]).

1. Essential Tax and Filing Requirements

The dates and rules you follow depend on your legal structure (Sole Trader vs. Limited Company).

Sole Traders & Self-Assessment

If you are registered with HMRC as a Sole Trader, you must file a personal Self-Assessment tax return annually.

• Registration Deadline: You must register with HMRC by 5th October after the end of the tax year in which you start trading.
• Filing & Payment Deadline: The deadline for submitting your online tax return and paying the tax you owe is 31st January following the end of the tax year.

Limited Companies & Corporation Tax

If you run a Limited Company, you must deal with Corporation Tax and file company accounts.

• Annual Accounts: Your company’s detailed financial accounts must be filed with Companies House, usually nine months after your financial year end.
• Tax Return (CT600): Your Corporation Tax return must be filed with HMRC 12 months after the end of your accounting period.
• Corporation Tax Payment: Payment is due nine months and one day after the end of your accounting period.

VAT Registration

VAT (Value Added Tax) is a tax added to most goods and services.

• The Threshold: You must legally register for VAT with HMRC if your taxable turnover exceeds £90,000 in any rolling 12-month period, or if you expect to exceed it in the next 30 days.
• Voluntary Registration: Many businesses register voluntarily, even below the threshold, typically to reclaim VAT they pay on business expenses (e.g., expensive equipment or services).
• Filing: If registered, you must submit VAT returns (and payment) to HMRC, usually quarterly.

2. When to Find a Local Accountant

While cloud accounting software makes basic bookkeeping easier, professional guidance is essential for growth, tax efficiency, and compliance.

When to Hire an Accountant

• Transitioning Structures: When moving from a Sole Trader to a Limited Company.
• High Revenue: When annual revenue is approaching the VAT threshold (£90,000).
• Tax Optimization: To ensure you claim all available allowable expenses and structure your income in the most tax-efficient way.
• Recruitment: Once you hire staff, you’ll need expertise in running PAYE and managing pension auto-enrolment.

Finding a Trusted Sussex Professional

It is highly beneficial to find an accountant who is local and understands the regional economy and support available (like the grants discussed in [Business Rates, Grants, and Funding Options]).

• Directories: Start your search with professional bodies like the Institute of Chartered Accountants in England and Wales (ICAEW) or local directories. A good place to find verified, regional accountants is through the ICAEW Find a Chartered Accountant Directory.

Our advice: Don’t wait until tax season to find an accountant. Get a recommendation and establish a relationship early. They should not only help with compliance but actively advise you on how to structure your business for profitable growth.