FAQ’s

As a minimum, all company accounts will detail the profits the company has made during the year and from this the Corporation Tax liability can be calculated. The accounts can also be used by banks and lenders, investors and even customers may request a copy as part of a tender process. With third parties potentially interested in your accounts it is important to ensure they are prepared accurately and are well presented.

Profit is the amount that is left after all trading expenditure have been deducted from income. In the UK, a Limited company must prepare accounts on an accruals basis, which means that income and expenses are recognised based on the period they arise or relate (this is often in line with the invoice date) rather than on a cash basis (that is when cash is received or paid). It is important to be aware that profit and cashflow are two very different metrics, both should be managed closely.

The balance sheet shows the assets and liabilities of a company at a point in time (the last day of the accounting period for statutory accounts). Assets are what the company owns or is owed – fixed assets, trade debtors/receivables, stock, cash. Liabilities are what the company owes – trade creditors/payables, taxes, loans. The net position (assets less liabilities) is equal to the share capital and retained earnings of the company. The strength of a company is often determined by the balance sheet value.

Accounts will need to be prepared up to the accounting reference date (ARD). On incorporation, Companies House will automatically set the ARD as the last day of the month of incorporation in the following year. A company can opt to change the ARD to any day of the year. For most limited companies, the accounts need to be filed at Companies House within 9 months after the ARD. Different rules may apply in the first year of trade depending on whether the ARD has been changed.

There is no one-size fits all answer to this, it can depend on what other sources of income you have, the financial position of the company and even the ownership structure of the business. Seeking advice on tax efficient remuneration planning to decide on the best mix of salary, dividends and pension can have a big impact on tax savings when carried out effectively.

The best structure will always be what works best for you in the long run, the right structure will depend on your goals for the business, expected growth and also your personal tax position. Commercial considerations may also be important such as limited liability, optics for the business and the customer/supplier norms. A sole trader, a partnership or a Limited company can all be the right option under the right circumstances. Having the planning discussions up front to ensure you get that structure right from the beginning can save significant tax and hassle further down the line. Get in touch and let’s discuss the structure that will work best for you.

Ideally you should start planning 2-5 years prior to an intended exit. This allows enough time to really focus on driving profitability and positioning the business to achieve maximum value. As well as maximising value, planning your exit well in advance will give the opportunity to structure the business in the best way to ensure the exit is tax efficient.

We can support with business valuations, financial due diligence and advise on the structure of a deal from a tax perspective, ensuring you understand the risks and opportunities at every stage. This can help you avoid costly pitfalls and secure the best outcome. The best deal isn’t just about price, the structure of the deal and the risks involved play a big part.

Most private limited companies can claim exemption from a statutory audit if they meet at least two of three size criteria for two consecutive years. Following significant changes that took effect for financial years beginning on or after 6 April 2025, the small company thresholds are now: annual turnover not exceeding £15 million, a balance sheet total not exceeding £7.5 million, and fewer than 50 employees. Even where a company falls within the exemption, an audit may still be required if your company is part of a group, if your Articles of Association require one, or if shareholders holding 10% or more of shares request it. If you’re unsure whether the new thresholds change your position, or whether retaining a voluntary audit still makes sense for your business, we’re happy to talk it through.

A statutory audit involves an independent examination of your financial statements to give shareholders and other stakeholders confidence that they present a true and fair view. At Cube Partners, we plan our audits carefully to minimise disruption, carrying out as much work as possible remotely or in advance of our on-site visit. We’ll agree a clear timetable with you at the outset and keep communication straightforward throughout. From the clients perspective, the process is far less onerous than they often expect.

If this is your first statutory audit, the most important step is getting the right team in place early. We’ll begin with a no-obligation conversation to understand your business, your financial reporting processes, and your timeline. From there, we’ll provide a clear fee proposal and an onboarding plan that helps you prepare your records and understand what to expect. Many of our clients come to us for their first audit and find that the process also brings valuable insight into their financial controls and reporting quality.

Management accounts are prepared regularly throughout the year, commonly on a monthly or quarterly basis, they are prepared to assist with internal decision making. The format can be tailored to best suit what management will find most useful. Statutory accounts are prepared annually and filed publicly to meet compliance reporting requirements, the format has to follow the accounting standards that have been adopted.

Depending on the level of transactions, weekly or monthly is often sufficient for most SMEs (Small and Medium Enterprises). Keeping your records up to date makes it a lot easier to track down any missing paperwork or remember what that one expense was for! Up to date records also opens up the opportunity to get more meaningful data from the numbers, introducing timely management accounts can help you have better visibility on business performance or highlight any looming issues at the earliest opportunity. Finally, up to date management accounts enable real time planning which can be far more effective, allowing sufficient time to make decisions.

In some cases but not all. If you have a VAT registered business or breach the thresholds for Maxing tax digital (MTD) for income tax then you are required to submit the relevant returns through MTD approved software. This can be by adopting an approved software or maintaining records in Excel and use bridging software to make the MTD submission to HMRC. There can be numerous benefits of adopting bookkeeping software over and above remaining compliant. These can range from automating processes to reduce bookkeeping time (and therefore bookkeeping fees if you outsource the work), improved visibility on business performance through suites of reports, scalability for the process to grow as your business does. If you are unsure if your current systems are working for you or you are just starting out and don’t know where to start, get in touch and we can help advise on a setup that is going to suit you and your business.

Auto-enrolment is a requirement for employers to automatically place eligible workers into a workplace pension scheme. If you are an employer in the UK and have at least one member of staff on your payroll, you are legally required to provide a workplace pension and make contributions to it.

Absolutely. Businesses will often engage third party providers to manage their payroll processing. This saves time internally and can often free someone up to focus on revenue generating tasks instead. Outsourcing to experts also ensures that the payroll is going to be run in line with the current regulations, reduces the risk of errors and therefore reduce potential penalties. At Cube Partners we provide payroll services to many of our clients and to some businesses we provide only payroll services, if you are considering outsourcing your payroll, get in touch.

Firstly you will need to decide on the name of the business, who the directors are going to be, who the shareholders are going to be (including their shareholdings and classes of shares) and how the company is going to be governed, this last point is covered in the Articles of Association, model articles can be adopted but custom articles can be a powerful tool especially if you have unconnected parties involved in the business. Once you have decided on these points, an IN01 form needs to be completed and filed with Companies House.

Setting up your business correctly from the beginning can save headaches down the line, company formations are something we can assist with and help you decide on the best set up, get in touch and let us get planning. See our incorporation checklist for further useful start up information.

If your business has a trading premises, that is often the chosen address. You should however consider who has access to the post at that address, you may not want staff having sight of letters from the likes of HMRC. If you don’t have a physical trading address or if you work from home, we would always recommend that you do not use your home address. The registered office is publicly available at Companies House and our advice would be to not publicly share where you live.

At Cube Partners, we offer a registered office service for our Corporate clients that are not keen on using their own address. Our address can be used as the Registered Office, any post we receive on your behalf will be scanned and sent to you.

You may need to file a tax return if during the tax year (6 April – 5 April) any of the following were applicable: operated as a sole trader, were a partner in a business partnership, received rental income, received untaxed savings/dividend/foreign income, you need to pay the High Income Child Benefit Charge (HICBC) or if you need to claim any reliefs (eg higher-rate relief on pension contributions, gift aid).

In past years, anyone earning over £100,000 a year needed to file a tax return, however that rule has been abolished. Even if you don’t need to file a return, you should check your PAYE tax code. When you earn over £100,000, your tax-free Personal Allowance decreases by £1 for every £2 you earn above the threshold. Your employer’s payroll might not automatically update your tax code to reflect this, meaning you could inadvertently underpay tax and face a surprise tax bill later.

You need to register online with HMRC at https://www.gov.uk/register-for-self-assessment. You must register by 5 October following the end of the tax year in which you are first required to file a return.

For example, if you began trading between April 2026 and April 2027, you need to register by 5 October 2027. Although the hard deadline is October, HMRC recommends registering as soon as you start trading.

If your total gross trading income is under £1,000 in a tax year, you generally do not need to register or pay tax on that income but you should check official guidelines if your earnings exceed this.

After registering, you will receive a Unique Taxpayer Reference (UTR) in the post which you will need to be able to file your annual Slf Assssment tax return.

Any expenditure can be allowable as long as the cost incurred is wholly and exclusively for business use. If costs are mixed use between business and personal then these costs often need to be apportioned to only claim a deduction of the business proportion.

You can usually claim either: a simplified flat rate per month or a proportion of actual bills used during home working (ie electricity, gas, broadband) based on a reasonable business use for self employed people.

For employed people, the working from home (WFM) tax relief has been completely abolished. From 6 April 2026, UK employees can no longer claim tax relief or deduction from HMC for additional household costs incurred while working from home.

Prior to 2026/27, HMRC allowed a flat rate for employees of £6 a week. It is possible to make a claim for the past years See https://www.gov.uk/tax-relief-for-employees/working-at-home

The rules for your employer have not changed. Employers can still choose to voluntarily reimburse you for homeworking expenses or equipment tax-free.

For the self employed and landlords, you need to keep your accounting records for at least 5 years following the 31 January deadline for the relevant tax year, for example, for the 2024-25 tax year, the online filing deadline was 31 January 2026, keep these records until at least 31 January 2031.

For companies it is 6 years from the end of an accounting period.

For individuals, you need to keep records for 22 months after the end of the tax year (e.g. records for the 20267/27 tax year shoud, be retained until at least 31 January 2029). However, to cover potential tax investigations it is highly recommended to retain all tax and employment records fo 6 years.

It is mandatory for your business to register for VAT when taxable turnover exceeds £90,000 over the past 12 months or is expected to exceed the threshold in the next 30 days. Any qualifying business can voluntarily register for VAT if turnover is below the threshold, this can sometimes be beneficial depending on the customer base and the business costs incurred. You cannot register for VAT if your business deal entirely in VAT-exempt goods and services. As you cannot charge VAT on these supplies, you are not eligible fo VAT registration meaning you also cannot reclaim VAT on your business expenses.

VAT can on be reclaimed on business expenditure but not all business expenditure attracts VAT. There are some costs like gifts and entertaining that may attract VAT as per the invoice but this VAT cannot be reclaimed. VAT can be a minefield and with ever changing rules, we would always advise that a VAT return is prepared by someone that is up to date on the latest rules. We assist many of our clients with their VAT returns, even if its just to review what they have prepared, giving them the comfort that it is correct. Contact us today to see how our Beehive services could give you that peace of mind.

If you pay subcontractors for construction services you will need to register for the Construction Industry Scheme (CIS) as a contractor. Once registered, you will be responsible for verifying the subcontractors you engage, deduct the correct amount of CIS and report and pay over any CIS you have deducted. As a subcontractor, there is not a requirement to register for CIS but without the registration, you will be subject to CIS deductions of 30% rather than 20% so there is a benefit to registering. For all CIS suffered during the year, this can be offset against your tax bill at year end.

The Construction Industry Scheme legislation is lengthy and can be complex. There are rules for obtaining Gross status so that no tax is deducted from your invoices. Rules defining whether the trading activity falls within the Construction Scheme. Rules for dfining who is a contractor and so on. It is important to be aware of all matter that affect your status as errors can be costly in terms of interest and penalties on any unpaid taxes.