Guide to running a UK business
When you run your own business in the UK, there are several things to consider, including registering your business, paying tax and choosing an accounting software.
Starting a business
When you start your business there are lots of decisions to be made. Writing a business plan, creating a budget, choosing a location and planning how to grow your business are your top priorities
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Registering as a business
There are several options of how you can register your business with HMRC:
- Sole trader
- Limited company
- Partnership
Each has its own benefits, structure and responsibilities. For example, a sole trader works for themselves and is solely responsible for their business debts, while a limited company is a separate entity with its own finances.
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Paying UK tax
Small businesses in the UK have several different taxes they may need to pay:
- Income tax
- VAT
- Corporation Tax
- Capital gains tax
- Dividends tax
Paying these taxes means you will need to register for them, and complete separate tax returns.
| Tax | When you pay | Tax return |
|---|---|---|
| Income tax | You are not a PAYE employee | Self Assessment tax return |
| VAT | You earn over £85,000 or are voluntarily registered for VAT | VAT Return |
| Corporation Tax | Limited company | Company Tax Return |
| Capital gains tax | You dispose of an asset that has increased in value | Self Assessment tax return |
| Dividends tax | Shareholder of a limited company | Self Assessment tax return |
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Manage expenses
It’s important to make sure that you aren’t spending too much money on expenses and to keep an eye on your cash flow. When you do your tax return, expenses become important as you will need to know where your outgoings are, and what is classed as an ‘acceptable expense’.
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Accounting software for UK businesses
An important part of running a UK business is choosing the right accounting software to manage your finances. Doing accounting not only gives you a clear picture of how your business is performing, but also means you keep the records you need to pay your taxes.
With Bokio accounting software, you can do your bookkeeping, invoicing, and manage your finances in one place. It’s also Making Tax Digital compatible, so you can submit an automated VAT Return quickly when you do your accounting with Bokio.
Here are some of Bokio’s great features:
- Automatic bank feeds to sync your transactions with Bokio
- Use bookkeeping templates to easily record transactions
- Client invoicing software to create customised, branded invoices
- Mobile accounting app to upload receipts and invoices
- Automated reports to help prepare your Self Assessment tax return
- Manage expenses for you and your employees
- Making Tax Digital (MTD) compliant software to submit VAT Returns online
