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What can I actually claim as a business expense?

Tue, 29 Sep 2026 13:59:23 GMT

Business Expenses for VAT registered Sole Traders and Limited Companies

Before we go any further...

This guide is general information for UK trading businesses. It is not a decision on whether a particular purchase qualifies for tax relief. The treatment depends on the facts, the business structure, the accounting method and, for directors and employees, the rules on pay and benefits. Corporation Tax, Income Tax and VAT also have separate rules; an allowable cost does not automatically give you a VAT reclaim. Rules and rates can change.

Keep the supporting invoice or receipt and always ask your accountant or use the HMRC links at the end of this article to review any uncertain or mixed-use cost before claiming it.

NOTE: The advice in this guide is current in September 2026.

The quick distinction in expenses claims for Sole and Ltd

A sole trader claims qualifying business costs against their own trading income. A limited company is a separate legal person and claims qualifying company costs against its taxable profits. Its bank account is not the director’s personal wallet, however persuasive that wallet may be.

Sole traders

If you are new to your VAT registration, then “Can I put that through the business?” is a fair question.

The answer depends on what you bought, why you bought it and whether you use it personally. If a cost has both business and private use, claim only the identifiable business part. Filing a receipt under “business” does not change what it was for.

Common costs you may generally claim...

Office and running costs.

Stationery, postage, software, business phone and internet use, and qualifying premises costs.

Equipment.

Tools, computers and printers. Under cash basis, most qualifying equipment is deducted as a business expense; under traditional accounting, capital allowances may apply.

Business travel.

Qualifying journeys and related costs. You may use simplified vehicle mileage rather than actual vehicle running costs where the conditions are met. Keep a mileage log (your accountant will be able to provide an excel template if it helps; “quite a lot” is not a measure that will go the distance with HMRC.

Stock and materials.

Goods bought for resale and materials used to make what you sell.

Marketing and professional costs.

Business advertising, relevant trade memberships and qualifying professional fees. The cost of preparing and submitting your personal Self Assessment return is not an allowable trading expense.

Working from home.

A reasonable business share of eligible household costs, or HMRC’s simplified flat rate where applicable. Keep records supporting the method used.

Costs to check more carefully

Ordinary clothes do not become protective workwear because you wore them to a client meeting. Uniforms and protective clothing can qualify, but must be clearly associated with the activity . Personal shopping, fines and client entertainment generally do not qualify as trading deductions. The coffee bought while reading this guide is probably on you.

Limited companies

A company may deduct qualifying day-to-day costs incurred for its business when calculating Corporation Tax. Some purchases, such as equipment kept for use in the business, may qualify through capital allowances instead. A cost can also be specifically disallowed even if it genuinely relates to the business.

Common company costs

Running costs.

Business rent, utilities, insurance, software, stationery, stock, materials, advertising and qualifying professional fees.

Equipment.

Computers, tools and machinery, with the tax treatment checked under the capital allowance rules.

Business travel.

Qualifying journeys, accommodation and meals while travelling for work. Ordinary commuting between home and a permanent workplace is treated differently. Note where you went and the business reason.

Costs paid for directors and employees

If the company provides something for personal use, a taxable benefit may arise. Business equipment provided for homeworking can be exempt where any private use is insignificant. A company-provided mobile phone has its own exemption rules. Check the arrangement before reimbursing a director’s personally contracted phone or other household bills.

Where the conditions are met, a company can pay towards an employee’s additional homeworking costs. HMRC permits up to £6 per week or £26 per month without evidence of the amount spent; higher payments require supporting evidence. This is different from an employee claiming homeworking tax relief directly from HMRC, which changed from April 2026.

The company card is not a magic wand

Client entertainment is generally disallowed for Corporation Tax, even if lunch led to a wonderful new contract. Staff entertaining follows different rules. If the company pays a director’s private bill, it may need to be recorded through the director’s loan account or treated under the pay and benefits rules. The family supermarket shop cannot be renamed “staff welfare” because it came out of the company account.

A simple habit that helps

Keep the invoice or receipt including evidence of VAT wherever possible, record the business purpose against the evidence if not clear (there is an option in Xero to "add a comment" when uploading a receipt), and importantly, separate personal spending wherever possible.

For mileage claims, retain the date, destination, purpose and distance.

When a purchase serves both you and the business, ask us before assuming the full cost is deductible.

Still not sure where an expense belongs?

Give us a call at Partridge Accountancy Services; We can advise how to record it correctly and claim the relief available or perhaps you could even take advantage of our great, fixed rate packages, rid yourself of the issue altogether, leave it to the professionals and understand why small businesses in the area choose us.

Partridge Accountancy Services

Personally tailored, personally delivered.

Simple.

Official HMRC guidance

Expenses if you are self employed — https://www.gov.uk/expenses-if-youre-self-employed

Simplified expenses — https://www.gov.uk/simpler-income-tax-simplified-expenses

Company expenses and Corporation Tax — https://www.gov.uk/guidance/company-expenses-you-can-deduct-before-paying-corporation-tax

Corporation Tax expenses — https://www.gov.uk/corporation-tax-rates/corporation-tax-expenses

Capital allowances — https://www.gov.uk/capital-allowances/what-you-can-claim-on

Director loans — https://www.gov.uk/directors-loans

Homeworking expenses and benefits — https://www.gov.uk/expenses-and-benefits-homeworking/homeworking-expenses-and-benefits-that-are-exempt-from-tax

Efficient Receipt and Invoice Record Keeping for a VAT Registered Business

Thu, 24 Sep 2026 16:32:15 GMT

Payment receipt or VAT receipt? Why the difference matters

A card receipt proves you paid. A VAT receipt helps show what you bought, who supplied it and whether VAT can be reclaimed. Here is how to spot the difference.

You buy £60 of supplies for your business and receive a small slip from the card machine. It says “Payment approved” . Can your accountant reclaim £10 VAT? Not from that slip alone. It confirms the payment, but it does not establish what was bought or whether VAT was charged.

Example 1: A payment receipt proves a transaction was paid, but it does not by itself support a £10 VAT claim.

What does an itemised VAT receipt show?

An itemised VAT receipt or invoice identifies the supplier and purchase, and provides the VAT information needed to check the claim. In the example below, the net price is £50, VAT at 20% is £10, and the total paid is £60. The accountant can see the actual VAT charged rather than guess it from the card payment.

Example 2: A VAT receipt with a separate VAT amount. All supplier details are fictional.

The document must also be valid for the type and value of purchase, and the expense must qualify for VAT recovery. A payment notification, bank statement or card terminal slip is useful evidence of payment, but it is not automatically a VAT invoice.

Does the receipt always have to print the VAT amount separately?

No. For a qualifying retail purchase of £250 or less , HMRC permits a simplified VAT invoice. It can show the supplier’s name, address and VAT number, date, description of the goods or services, and the VAT inclusive total with the applicable VAT rate . It does not have to print a separate £10 VAT line. If the whole £60 purchase is subject to 20% VAT, the VAT fraction is one sixth, giving £10 VAT. Where different VAT rates apply, each rate and its VAT inclusive total must be identifiable. For larger purchases, ask for a full VAT invoice.

Example 3: A qualifying simplified VAT receipt can support a calculation of £10 VAT even though £10 is not printed as a separate amount.

Why can’t we just assume every £60 purchase includes £10 VAT?

Some purchases are zero rated or exempt, some suppliers are not VAT registered, and a single shop receipt can contain items at different VAT rates. A total payment alone tells us none of this. Claiming guessed VAT could overstate your VAT recovery. HMRC normally requires a valid VAT invoice as evidence; if one is missing, the first step is to request it from the supplier. HMRC may consider alternative evidence in exceptional circumstances, but that is not a routine substitute for a proper invoice.

You can still record a genuine business expense without reclaiming VAT when the VAT evidence is missing. Whether the cost is deductible for other taxes is a separate question from whether VAT is recoverable.

What should you send your accountant?

Ask for a VAT receipt or VAT invoice when you buy for the business, especially if the purchase is over £250.
Check that it names the supplier, describes the purchase, and gives the VAT details appropriate to the invoice type.
Upload the actual purchase receipt or invoice to your accounting records. If you also have a card slip, attach it as supporting proof of payment (ensuring that it doesn't obscure any details of the itemised receipt!).
If you only have a card slip, ask the supplier for a replacement VAT receipt or invoice. Do not write “20% VAT” on it yourself as you cannot "self certify" for a claim on VAT.

A quick rule of thumb: “Payment approved” proves only that you paid; a valid VAT receipt or invoice shows what VAT, if any, may be reclaimed.

If you are unsure which document you have, send it to Partridge Accountancy Services and we can check it.

PLEASE NOTE

VAT recovery depends on your VAT registration, business use and the normal input tax rules.

Sources: HMRC VAT Notice 700, sections 16.3, 16.6 and 19.5 and HMRC guidance on alternative evidence .

Partridge Accountancy Services
Helping businesses stay informed, compliant and prepared.

Simple.

Website: www.partridgeaccountancy.co.uk
Email: admin@partridgeaccountancy.co.uk

Are You Making the Best of Your Xero Subscription? Things Xero Can Do That May Surprise You

Mon, 14 Sep 2026 19:28:03 GMT

Many businesses subscribe to Xero because their accountant recommended it—but then use only a small part of what it can do.

Perhaps you log in occasionally to check the bank balance, upload a few receipts or leave everything for your bookkeeper. Meanwhile, useful features that could save time, improve cash flow and make running your business easier remain untouched.

Xero is much more than somewhere to store transactions and prepare your year-end accounts. When it is set up and used correctly, it can become a valuable everyday business tool.

Here are some of the things Xero may be able to do for you.

Create and send professional invoices

You can create branded sales invoices directly within Xero and email them to customers without preparing separate documents.

Your invoice can include:

Your business name and contact details
Your logo and branding
A description of the goods or services supplied
Payment terms
Your bank details
VAT information, where applicable
A payment link, if a compatible payment service is connected

You can also see whether an invoice has been sent, viewed or paid, helping you monitor what is happening without searching through your emails.

Automatically create recurring invoices

Do you charge the same customers the same amount every week, month or quarter?

Instead of manually raising each invoice, Xero can create repeating invoices automatically. Depending on your settings, they can either be saved as drafts for you to review or approved and sent directly to the customer.

This can be particularly useful for businesses offering:

Monthly memberships
Retainer services
Regular maintenance
Property management
Subscriptions
Ongoing consultancy
Regular cleaning or care services

Once configured correctly, repeating invoices can remove another repetitive task from your monthly workload.

Send automatic payment reminders

Chasing unpaid invoices is one of the least enjoyable parts of running a business.

Xero can send automatic reminders when an invoice is approaching its due date or has become overdue. You can customise the timing and wording so that the messages suit your business.

A polite reminder can often prompt payment without you having to compose an awkward email.

Automation should not replace personal communication where a customer has a genuine query or is experiencing difficulty, but it can significantly reduce routine credit-control work.

Make it easier for customers to pay you

Xero can connect with compatible online payment services, allowing customers to pay through a link on the invoice.

Offering a straightforward payment method may help reduce delays caused by customers having to find your bank details and make a separate transfer.

There may be transaction charges, so you should review the provider’s terms and fees before enabling this facility.

Create quotes and turn them into invoices

If your business provides estimates or quotations, you may be able to create and send them through Xero.

Once the customer accepts a quote, you can convert it into an invoice without retyping all the details. This reduces administration and helps avoid differences between the amount quoted and the amount invoiced.

It can also give you a clearer record of which quotes have been sent, accepted, declined or are still awaiting a response.

Connect directly to your bank

Bank feeds bring transactions from your business bank account into Xero, reducing the need to enter everything manually.

You can then match each bank transaction against an invoice, bill, expense or other accounting entry.

This does not mean that Xero completes the bookkeeping entirely by itself. Transactions still need to be reviewed and coded correctly—but bank feeds make the process faster and help ensure that fewer items are overlooked.

Use bank rules for regular transactions

If the same type of payment appears regularly, bank rules can help suggest how it should be treated.

For example, a bank rule might recognise:

Monthly software subscriptions
Regular rent payments
Bank charges
Insurance premiums
Telephone bills
Routine transfers

Bank rules can save time, but they must be created carefully. A badly designed rule can repeatedly place transactions in the wrong category or apply the wrong VAT treatment.

Automation is useful—but it still needs human oversight.

Keep bills and supplier payments organised

Xero is not only for money coming into the business. You can also enter and monitor bills you need to pay.

This can help you see:

Which suppliers are owed money
When bills are due
Which bills have been paid
What payments are approaching
How future payments may affect cash flow

Keeping bills up to date can give you a much more realistic view of your financial position than simply looking at the balance in your bank account.

A healthy bank balance does not necessarily mean that all the money is available to spend if VAT, tax, wages and supplier bills are still outstanding.

Store documents alongside transactions

Depending on the tools and subscription available to you, receipts and supplier documents can be uploaded and attached to the relevant transaction.

This helps reduce paper storage and makes it easier to find the supporting document later.

Rather than searching through an overflowing email inbox or a drawer full of receipts, you can open the transaction and view the document attached to it.

Keeping digital records is also increasingly important as more businesses are brought into Making Tax Digital.

Monitor who owes you money

Xero can show outstanding customer invoices and how long they have remained unpaid.

This helps you identify:

Invoices that are about to become overdue
Customers who regularly pay late
Large balances requiring attention
Payments that may not have been allocated correctly

Regularly reviewing your aged receivables report can improve cash flow and reduce the risk of forgotten debts.

A sale is good news—but it does not help your bank balance until the customer actually pays.

Access your accounts from almost anywhere

Because Xero is cloud-based, you are not restricted to one computer in one office.

You can access your financial information online, and Xero also offers mobile functionality for carrying out certain tasks while you are away from your desk.

Depending on your setup and plan, you may be able to:

Send an invoice after completing a job
Review transactions
Photograph and upload a receipt
Check whether a customer has paid
Record an expense
Monitor key figures

This can be particularly useful for tradespeople, consultants, landlords and other business owners who are regularly on the move.

Give your accountant access to live information

One of the greatest benefits of Xero is that you and your accountant can work from the same information.

There is no need to email different versions of spreadsheets backwards and forwards or wait until the year-end to discover that something is missing.

With suitable access, your accountant can:

Review the bookkeeping
Investigate unusual transactions
Correct errors
Monitor VAT
Prepare reports
Help answer questions using current figures

This creates a much more collaborative relationship and allows potential issues to be identified earlier.

Prepare and submit VAT returns

For VAT-registered businesses, Xero can calculate VAT from the transactions entered and support digital VAT-return preparation and submission.

However, the VAT return is only as accurate as the records behind it.

Incorrect VAT rates, duplicated transactions, missing purchases or personal expenses can all affect the result. The return should still be properly reviewed before it is submitted to HMRC.

Xero is a useful tool, but it cannot automatically decide the correct VAT treatment of every transaction.

Track projects, time and profitability

Some Xero plans or additional features allow businesses to track time and costs against individual projects.

This can help you understand:

How much time a job has taken
Which costs relate to a particular project
Whether the work was profitable
Whether you are charging enough
Which types of work provide the best return

A project may bring in plenty of revenue but still make very little profit once staff time, materials and other costs are considered.

Knowing the difference can help you price future work more effectively.

Record expenses and mileage

Depending on your subscription, Xero may offer tools for submitting expenses and recording business mileage.

This can make it easier for business owners and employees to record costs promptly rather than trying to reconstruct everything months later.

Expenses still need to be genuinely business-related, supported by appropriate evidence and treated correctly for tax and VAT purposes.

Using an app does not automatically make every expense allowable—but it can make the record-keeping much more efficient.

Run payroll

Xero offers payroll tools that can help eligible UK businesses calculate wages, produce payslips, record deductions and report payroll information.

Payroll is a sensitive area with strict deadlines and responsibilities, so the system needs to be configured and maintained correctly.

Features and employee limits can vary between subscription plans. Pension contributions, statutory payments, benefits and unusual payroll situations may also require additional attention.

View reports throughout the year

Your Profit and Loss report and Balance Sheet are not only for your accountant to review at the year-end.

Regular reporting can help you answer important questions such as:

Is the business making a profit?
Are costs increasing?
Which customers owe money?
Can the business afford a new commitment?
Is there enough cash for the next VAT or tax payment?
Are sales improving or declining?
Does the bank balance agree with the accounting records?

Reports become much more useful when the bookkeeping is kept up to date and reviewed regularly.

Connect Xero with other business applications

Xero can integrate with a wide range of third-party applications covering areas such as:

Payment collection
E-commerce
Stock management
Receipt processing
Expenses
Time tracking
Customer management
Cash-flow forecasting
Reporting

An integration may reduce duplicated work, but more technology is not always better.

Before connecting another application, consider:

What problem will it solve?
Will it genuinely save time?
What will it cost?
Who will monitor it?
Could it duplicate information?
Will it apply the correct tax and VAT treatment?

The best software arrangement is usually the simplest one that meets the genuine needs of the business.

Is every feature included in every Xero subscription?

No. Available features, usage limits and add-ons can vary according to your Xero plan and may change over time.

Before relying on a particular feature, check your current subscription and any additional charges. You can review the latest information on the Xero website .

There is little benefit in paying for features you do not use—but equally, upgrading may be worthwhile if a feature would save significant time or improve your financial controls.

Remember: Xero does not replace good bookkeeping

Xero can automate tasks and make your records more accessible, but it cannot guarantee that everything is correct.

The software cannot always know:

Whether a cost is genuinely business-related
Which tax category should be used
Whether VAT can be reclaimed
Whether a payment relates to the director’s loan account
Whether a transaction has been duplicated
Whether an invoice will actually be paid
Whether your business is operating tax-efficiently

If incorrect information is entered, Xero can produce very polished reports containing very inaccurate figures.

The best results come from combining suitable software with regular bookkeeping, careful reviews, professional assistance and advice.

Could you be getting more from Xero?

If you already subscribe to Xero but use it only for basic bookkeeping, there may be opportunities to save time and gain better financial information.

At Partridge Accountancy Services, we can help you:

Review your current Xero setup
Choose an appropriate subscription
Set up invoices and repeating invoices
Configure payment reminders
Review bank feeds and bank rules
Improve bookkeeping processes
Move records from another system
Correct existing errors
Provide Xero guidance and training
Manage some or all of your bookkeeping
Produce useful reports
Prepare VAT returns and annual accounts

Sometimes a few small changes can make a significant difference to how efficiently your business uses Xero.

Are you making the best of your Xero subscription?

Contact Partridge Accountancy Services for a friendly conversation about your current setup and how we can help you get more value from it.

Website: www.partridgeaccountancy.co.uk
Email: admin@partridgeaccountancy.co.uk

Partridge Accountancy Services
Helping businesses stay informed, compliant and prepared.

Simple.

Thinking of changing Accountant? Here is what actually happens.

Mon, 14 Sep 2026 18:04:17 GMT

Thinking of Changing Accountant? Here’s What Actually Happens

Have you been considering changing accountant but keep putting it off because you are worried it will be complicated, awkward or disruptive?

You are not alone. Many business owners remain with an accountant who no longer suits them simply because they are unsure how the switching process works.

The good news is that changing accountant is usually far easier than people expect. Once you have chosen your new accountant and given the necessary permission, most of the handover happens directly between the two accountancy practices.

Here is what actually happens.

Why do people change accountants?

There are many perfectly reasonable reasons for looking for a new accountant. You may feel that:

Your questions take too long to be answered.

You rarely speak to the same person.

Your accounts are always completed at the last minute.

You receive unexpected bills.

Everything is explained using technical jargon.

You are not receiving proactive tax advice.

Your business has grown and needs more support.

You need help with bookkeeping, payroll, VAT or Making Tax Digital.

You would prefer a more personal and collaborative relationship.

Changing accountant does not necessarily mean your previous accountant has done anything wrong. Sometimes a business simply outgrows the service it originally needed.

The important thing is finding an accountant who understands your business and provides the right level of support for where you are now.

Step 1: Speak to your prospective new accountant

Before making any decisions, arrange a conversation with the accountant you are considering.

At Partridge Accountancy Services, we would normally discuss:

What your business does

Your business structure

The services you currently receive

Your bookkeeping arrangements

The accounting software you use

Any upcoming deadlines

Any concerns or unresolved issues

The support you would like going forward

Our services and monthly fees

This gives both parties the opportunity to decide whether they are a good fit.

We will explain clearly what is included in your proposed package, what information we will need and what the next steps would be. There is no obligation to proceed after the initial conversation.

Step 2: Tell your existing accountant

Once you have decided to move, you will need to let your current accountant know.

It is worth checking your engagement letter first, as it may include a notice period or particular arrangements for ending the service.

Your message does not need to be lengthy or confrontational. You can simply explain that you have decided to appoint another practice and give permission for your information to be released to your new accountant.

You should also check whether:

Any fees remain outstanding

Your accountant has unfinished work in progress

A tax return, VAT return or set of accounts is approaching its deadline

You hold any original documents that may be needed

It is best to clarify who will complete any work already underway so that nothing is overlooked during the transition.

Step 3: Complete the onboarding process

Every reputable accountancy practice must carry out certain checks before accepting a new client.

These will normally include:

Confirming your identity and address

Understanding your business activities

Completing anti-money laundering checks

Agreeing which services will be provided

Signing an engagement letter

Obtaining authority to deal with HMRC

Collecting relevant company and tax information

These checks are standard legal and professional requirements. They protect both you and the accountancy practice.

At Partridge Accountancy Services, we use a secure client portal to make the onboarding process as straightforward as possible.

Step 4: Your new accountant contacts the previous accountant

With your permission, your new accountant will contact your outgoing accountant.

This is often called requesting “professional clearance”, although “professional enquiry” is the more accurate term.

Your previous accountant is not being asked whether you are allowed to leave. You are entitled to choose who provides your accountancy services.

The purpose of the enquiry is to ask whether there is any professional reason why the new accountant should not accept the appointment and to request the information required for a smooth handover.

In most cases, this communication takes place directly between the two practices. You should not need to act as the messenger.

Step 5: Your records are transferred

Your previous accountant will normally provide the relevant information they hold about your business or personal tax affairs.

Depending on your circumstances, this may include:

Previous annual accounts

Corporation Tax returns and computations

Self Assessment tax returns

VAT and payroll records

Capital allowance schedules

Details of business assets

Director’s loan account information

PAYE details

Accounting software balances

HMRC correspondence

Information about outstanding queries or deadlines

Your new accountant will review the information received and let you know if anything else is required.

There can occasionally be delays if information is missing, fees are disputed or the outgoing accountant is slow to respond. However, most transfers are completed without difficulty.

What happens to your accounting software?

If you use cloud accounting software such as Xero or QuickBooks, access can often be transferred to your new accountant without losing your existing information.

If you would also like to move to different software, your new accountant can discuss the best time and method for transferring your records.

You should avoid cancelling accounting software, payroll systems or payment collection services until the transition has been reviewed. Cancelling too early could interrupt your invoicing, bookkeeping, payroll or Direct Debit collections.

Partridge Accountancy Services works primarily with Xero, and we can help clients move from other systems where appropriate.

Can you change accountant at any time?

Yes, you can normally change accountant at any point during the year. You do not necessarily have to wait until your company year-end or until your next tax return has been submitted.

However, the timing should be considered carefully if:

Your accounts or tax return deadline is approaching.

A VAT return is due shortly.

Payroll is about to be processed.

HMRC is carrying out an enquiry.

Your existing accountant has almost completed a piece of work.

Your bookkeeping is significantly behind.

Sometimes it makes sense for the outgoing accountant to finish a particular return or set of accounts. In other cases, the new accountant can take over immediately.

A good accountant will consider the circumstances and recommend the smoothest option for you.

Will changing accountant cause problems?

In most cases, no.

Changing professional adviser is a normal part of running a business. Accountants regularly receive new clients and transfer existing clients to other practices.

You should not feel guilty about making a change. You are entitled to work with someone who communicates clearly, understands your needs and gives you confidence in your finances.

The transition is usually easiest when you are honest with both practices about:

Why you are moving

Any outstanding work

Approaching deadlines

Unpaid invoices

Problems with the bookkeeping

Any ongoing communication with HMRC

Providing complete and accurate information from the beginning helps prevent delays and confusion.

What should you look for in a new accountant?

Price is important, but it should not be the only consideration.

Before appointing a new accountant, ask yourself:

Are their fees clear?

What is included in the service?

How quickly do they normally respond?

Will you have a regular point of contact?

Do they understand businesses like yours?

Can they support your bookkeeping, payroll and VAT requirements?

Do they explain tax matters in plain English?

Are they comfortable with modern accounting software?

Will they offer advice throughout the year rather than only at the year-end?

A good accountant should make you feel supported and informed—not embarrassed to ask questions.

Moving to Partridge Accountancy Services

At Partridge Accountancy Services, we aim to make changing accountant feel simple and reassuring.

We support small businesses, limited companies, sole traders and landlords with:

Annual accounts

Corporation Tax

Self Assessment

VAT returns

Payroll

Bookkeeping

Xero

Making Tax Digital

Ongoing business and tax support

We offer fixed monthly packages, friendly advice and a collaborative approach. We want our clients to understand their numbers and feel comfortable contacting us whenever they need help.

If you decide to appoint us, we will:

Explain our services and fees clearly.

Guide you through our secure onboarding process.

Contact your previous accountant with your permission.

Review the records and information received.

Identify any missing information or urgent deadlines.

Help you become comfortable with our systems.

Remain approachable when you have questions.

Our role is not simply to submit forms. We want to understand your business, work alongside you and help you feel in control of your finances.

Thinking about making a change?

If your current accountancy service no longer feels right, you are welcome to have an informal and confidential conversation with us.

There is no obligation to move, and you do not need to contact your existing accountant before speaking to us.

We can listen to your concerns, explain how the transfer would work and provide clear information about our monthly packages.

Changing accountant may feel like a significant decision—but the process itself can be surprisingly straightforward.

Contact Partridge Accountancy Services today to find out how we can help.

Website: www.partridgeaccountancy.co.uk
Email: admin@partridgeaccountancy.co.uk

Partridge Accountancy Services
Helping businesses stay informed, compliant and prepared.

Simple.

A bit of Accountancy Humour (and you thought we were boring!)

Thu, 03 Sep 2026 17:15:13 GMT

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Accountants are generally calm people full of good Chi. ��‍♀️

We like numbers ��
balancing things ⚖
reconciliations that....well... reconcile. ��

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Every now and then, a client does something that makes even the most experienced Chi master accountant, tilt their head slightly and stare silently at the screen for a few seconds ��before getting busy, restoring balance and reconciliation.

A slight hesitation of perfect...exciting... Accountancy office... Chi.

So, if your goal is to give your accountant a minor nervous breakdown ��, or perhaps question their career choices ��; here are seven highly effective ways to do it!

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Nothing says “I❤️value��our��working��relationship” quite like sending an email with twelve months’ worth of records the day before the Self Assessment deadline with an attachment containing 63 separate photographs of receipts, several bank statements and one mysterious spreadsheet called: FINAL ACCOUNTS NEW VERSION 3.xlsx

Bonus points if the email says: “PS. Shouldn’t take long; there’s hardly anything there.” ��

In reality, the earlier you send your records, the more time your accountant has to check everything properly, identify tax-saving opportunities and deal with any unexpected issues��

��. �� … �� ... ��

A shoebox is traditional. A carrier bag.... acceptable. The glove compartment of your car adds an element of adventure. �� but for a more modern approach, take photographs of receipts and scatter them between WhatsApp, your camera roll, emails and screenshots. Then, when your accountant asks for them, simply reply:

“�� ꛘ��ꛚꚲ ��ꛘ�� ꚲ��ꚶ...” ��

Thankfully, accounting software such as Xero can make keeping records much easier. Receipts can be uploaded as you go instead of embarking on an archaeological excavation project at the end of the year. �� Try to remember to upload your receipts as you receive them; it will soon become second nature and a great habit to have!

��. ��: “�� ” ��

Every accountant has heard some variation of this sentence.

“My mate says I can put my holiday through the company.” ��️

“My brother’s accountant lets him claim his clothes.” ��

“My friend bought a car through his business, so I assume I can too?” ��

Sadly, tax legislation does not include the phrase:

“Because Dave down the pub said so.” ��
A shame, because that would make things so much easier...

What you can and cannot claim often depends on the nature of your business, of the expense and how it is used. Asking before purchasing that lovely new sports car is usually much easier than trying to part with it afterwards. ��

��. ��

Tesco, Netflix, School shoes, A weekend away, The dog groomer, Three rounds at the pub and one payment for £847.26 to someone called “Steve”, with absolutely no explanation. ��

Once the fun is over, your accountant will then have the exciting task of working out which transactions relate to the business and which ones relate to your Saturday afternoon. ��

Keeping business and personal spending separate is not always possible, but where it is it saves time, reduces mistakes, HMRC queries on how Rovers grooming regime adds value to the business �� and best of all, makes your accounts much easier to understand and extract useful information from. ��

��. ��

Your company bank balance is looking healthy.........Excellent! ��

Unfortunately, that does not automatically mean all of that money belongs to you personally. ��

Limited company money can usually come out in specific ways, such as salary, dividends, repayment of money owed to you, expenses or other properly recorded transactions.

Randomly transferring £5,000 to yourself with the reference “money” can create some interesting conversations about your director’s loan account.

Before making large withdrawals, speak to your accountant. It can save a considerable amount of tax — and several emails. ��

��. �� ; �� "��" (�� !)

“Oh, by the way…” ��

These four words can strike fear into the heart of any accountant. ��

“Oh, by the way, I also rent out a property.” ��

“Oh, by the way, I sold some shares.” ��

“Oh, by the way, I have another company.” ��

“Oh, by the way, I received some income from overseas.” ��

Please be mindful to mention the “by the way” things before your tax return is submitted wherever possible. ��

Income, investments, property, capital gains and overseas interests can all have tax implications, even if they do not seem particularly important at the time. ��

��. ��

We understand; HMRC envelopes rarely contain birthday cards. �� But putting the letter in a drawer does not normally make the problem disappear. ��

Sometimes the letter is simply requesting information. Sometimes HMRC thinks something is missing. Sometimes there is advice of a deadline to respond to.

Whatever it is, your accountant would much rather see the letter straight away than three months later with:

“I completely forgot about this — not important...is it?” ��

More often than not, yes. It is. ��

ꖡꖾꗍ ꕷꗍ��ꕯꗞꖹꕷ ꕗꕯꖡ ��

Good accounting does not need to be stressful.

Keeping records up to date, separating personal and business transactions, using accounting software properly and speaking to your accountant before making major financial decisions can make a huge difference.

At Partridge Accountancy Services, we would much rather help you plan ahead than help you untangle everything afterwards.

Although, to be fair, we are quite good at untangling things too; so do not let it put you off getting in touch!

So if you recognised yourself in three or more of the points above, perhaps it is time to have a chat and see how we can help you to get back on track (Preferably before 30 January).

ＮｅｅｄＨｅｌｐＷｉｔｈＹｏｕｒ ▲ｃｃｏｕｎｔｓ？

Whether you are a sole trader, limited company, landlord or growing small business, Partridge Accountancy Services can help with bookkeeping, tax returns, VAT, payroll, Xero, Making Tax Digital and year-round accounting support.

Get in touch with us to find out how we can help make your accounts a little less stressful for you.

Oh..... and your accountant ��

Partridge Accountancy Services
Helping businesses stay informed, compliant and prepared.

Simple.

Tax Deadlines Every Small Business Owner Should Know

Wed, 02 Sep 2026 19:28:30 GMT

Tax Deadlines Every Small Business Owner Should Know

Running a small business means juggling customers, suppliers, staff, cash flow and everything else that comes with being your own boss.

Unfortunately, HMRC deadlines do not disappear just because you are busy.

Missing a tax or filing deadline can lead to penalties, interest and unnecessary stress, so knowing the key dates in advance is one of the simplest ways to keep your business finances under control.

Here are some of the main tax deadlines UK small business owners should be aware of.

Self Assessment – 31 January

For sole traders, landlords, company directors and others who need to complete a Self Assessment tax return, 31 January is one of the most important dates in the tax calendar.

For the 2025/26 tax year , the deadline for filing your online Self Assessment tax return is:

31 January 2027

This is also normally the deadline for paying:

any Income Tax and National Insurance due for 2025/26; and
your first payment on account towards the 2026/27 tax year, where applicable.

NOTE: If you are filing a paper tax return, the deadline is earlier: 31 October 2026 .

Try not to leave your tax return until January

Although the deadline is in January, you can prepare your tax return as soon as the tax year ends on 5 April.

Completing it earlier gives you more time to:

understand how much tax you owe
plan your cash flow
check whether anything is missing
avoid the January rush

NOTE: Submitting your tax return early does not mean you have to pay the tax early.

Payments on Account – 31 January and 31 July

If you are self-employed and your tax bill meets the relevant criteria, HMRC may ask you to make payments on account towards your next tax bill.

These are normally paid in two instalments:

31 January

and

31 July

This often catches new business owners by surprise.

For example, your January bill could include both the outstanding tax for the previous year and an advance payment towards the next year.

Good tax planning can help make sure this does not come as an unpleasant surprise.

Making Tax Digital for Income Tax – Quarterly Deadlines

Making Tax Digital for Income Tax became mandatory from 6 April 2026 for qualifying sole traders and landlords with relevant qualifying income over £50,000.

Instead of only dealing with HMRC once a year, those within MTD must maintain digital accounting records and send quarterly updates using compatible software.

The standard quarterly deadlines are:

7 August
7 November
7 February
7 May

For the 2026/27 tax year, the first quarterly deadline was 7 August 2026 , followed by 7 November 2026 , 7 February 2027 and 7 May 2027 .

The quarterly updates do not replace your annual tax return. You will still need to complete your year-end tax submission.

HMRC has confirmed that penalty points will not be issued for late quarterly MTD updates during the 2026/27 tax year, although the updates still need to be submitted before the annual tax return can be completed.

VAT Returns – Usually Every Three Months

If your business is VAT registered, you will usually submit a VAT return every three months.

The deadline is generally:

One month and seven days after the end of the VAT period.

For example, if your VAT quarter ends on 31 March , your VAT return and payment would normally be due by 7 May .

VAT deadlines will vary depending on the VAT quarters allocated to your business, so it is important to check your own VAT schedule rather than relying on another business's dates.

Keeping your bookkeeping up to date throughout the quarter makes preparing your VAT return much easier.

PAYE and Payroll Deadlines

If you employ staff, payroll brings its own set of regular deadlines.

Your Full Payment Submission (FPS) should normally be sent to HMRC on or before the date you pay your employees .

PAYE and National Insurance collected through payroll is then usually payable to HMRC by the:

22nd of the following month if paying electronically.

For businesses that qualify to pay PAYE quarterly, different payment dates can apply.

Payroll errors can affect not only your business but also your employees' tax records, pensions and benefits, so this is one area where being organised is particularly important.

Corporation Tax Payment – 9 Months and 1 Day

Limited companies have different deadlines from sole traders.

For most small companies, Corporation Tax must be paid:

9 months and 1 day after the end of the Corporation Tax accounting period.

For example, if your company's year end is:

31 March 2026

the Corporation Tax payment deadline would normally be:

1 January 2027

An important point to remember is that the tax is normally due before the Corporation Tax return itself has to be filed .

Corporation Tax Return – 12 Months

Your company's Corporation Tax Return must usually be submitted to HMRC:

12 months after the end of the accounting period.

So, using the same company with a 31 March 2026 year end, the Corporation Tax Return would normally need to be filed by:

31 March 2027

Even if your company has made a loss or has no Corporation Tax to pay, you may still be required to file a Company Tax Return if HMRC has issued a notice requiring one.

Companies House Accounts – Usually 9 Months

Limited companies also need to file annual accounts with Companies House.

For most private limited companies, the deadline is:

9 months after the company's financial year end.

For example:

Company year end: 31 March 2026

Companies House filing deadline: 31 December 2026

Different rules apply to a company's first set of accounts. A private company's first accounts are generally due 21 months after incorporation , although the exact deadline depends on the accounting period.

Confirmation Statement – Every Year

Every UK limited company must also submit a Confirmation Statement to Companies House.

This confirms important company information such as:

registered office
directors
shareholders
people with significant control
share capital
certain business information

Your Confirmation Statement date is specific to your company, so this is not one universal annual deadline.

It is important not to confuse the Confirmation Statement with your annual accounts. They are separate filing obligations.

Your Company's Deadlines May Be Different

One of the reasons business deadlines can become confusing is that not every business follows exactly the same calendar.

Your deadlines may depend on:

whether you are a sole trader or limited company
your company's financial year end
your VAT quarters
whether you operate payroll
whether you fall within Making Tax Digital
your personal Self Assessment circumstances

This is why simply copying dates from another business owner is rarely a good idea.

Missing a Deadline Can Cost You

Leaving things until the last minute can result in:

late filing penalties
late payment penalties
interest
Companies House penalties
HMRC correspondence
cash-flow problems
unnecessary stress

More importantly, repeatedly preparing your accounts at the last minute makes it difficult to use the financial information to actually manage your business.

Your accounts should tell you what is happening in your business — not simply become something you deal with when HMRC asks for them.

A Simple Way to Stay Ahead

A good routine is to keep your bookkeeping updated throughout the year rather than trying to reconstruct everything just before a deadline.

Ideally:

reconcile your bank regularly
upload receipts as you receive them
review outstanding invoices
keep payroll information up to date
set money aside for tax
speak to your accountant before making major financial decisions

The earlier we have accurate information, the more opportunity there is to identify problems and consider tax-planning opportunities.

Need Help Keeping Track of Your Business Deadlines?

At Partridge Accountancy Services , we help sole traders and limited companies stay on top of their accounts, VAT, payroll, Corporation Tax, Self Assessment and Making Tax Digital obligations.

Our aim is not simply to file everything on the deadline.

We want our clients to know what is due, when it is due and roughly what they should expect to pay , so there are fewer surprises.

If you would like help getting your business finances organised and making sure important deadlines are not missed, please get in touch with Partridge Accountancy Services .

Running a small business means juggling customers, suppliers, staff, cash flow and everything else that comes with being your own boss.

Unfortunately, HMRC deadlines do not disappear just because you are busy.

Missing a tax or filing deadline can lead to penalties, interest and unnecessary stress, so knowing the key dates in advance is one of the simplest ways to keep your business finances under control.

Here are some of the main tax deadlines UK small business owners should be aware of.

Self Assessment – 31 January

For sole traders, landlords, company directors and others who need to complete a Self Assessment tax return, 31 January is one of the most important dates in the tax calendar.

For the 2025/26 tax year , the deadline for filing your online Self Assessment tax return is:

31 January 2027

This is also normally the deadline for paying:

any Income Tax and National Insurance due for 2025/26; (and, in some cases)
your first payment on account towards the 2026/27 tax year, where applicable.

NOTE: If you are filing a paper tax return, the deadline is earlier: 31 October 2026 .

Don't leave your tax return until January

Although the deadline is in January, you can prepare your tax return as soon as the tax year ends on 5 April.

Completing it earlier gives you more time to:

understand how much tax you owe
plan your cash flow
check whether anything is missing
avoid the January rush

NOTE: Submitting your tax return early does not mean you have to pay the tax early.

Payments on Account – 31 January and 31 July

If you are self-employed and your tax bill meets the relevant criteria, HMRC may ask you to make payments on account towards your next tax bill.

These are normally paid in two instalments:

31 January

and

31 July

This often catches new business owners by surprise.

For example, your January bill could include both the outstanding tax for the previous year and an advance payment towards the next year.

Good tax planning can help make sure this does not come as an unpleasant surprise.

Making Tax Digital for Income Tax – Quarterly Deadlines

Making Tax Digital for Income Tax became mandatory from 6 April 2026 for qualifying sole traders and landlords with relevant qualifying income over £50,000.

Instead of only dealing with HMRC once a year, those within MTD must maintain digital accounting records and send quarterly updates using compatible software.

The standard quarterly deadlines are:

7 August
7 November
7 February
7 May

For the 2026/27 tax year, the first quarterly deadline was 7 August 2026 , and will be followed by 7 November 2026 ,

7 February 2027 and 7 May 2027 .

The quarterly updates do not replace your annual tax return. You will still need to complete your year-end tax submission.

VAT Returns – Usually Every Three Months

If your business is VAT registered, you will usually submit a VAT return every three months.

The deadline is generally:

One month and seven days after the end of the VAT period.

For example, if your VAT quarter ends on 31 March , your VAT return and payment would normally be due by 7 May .

VAT deadlines will vary depending on the VAT quarters allocated to your business, so it is important to check your own VAT schedule rather than relying on another business's dates.

NOTE: Keeping your bookkeeping up to date throughout the quarter makes preparing your VAT return much easier.

PAYE and Payroll Deadlines

If you employ staff, payroll brings its own set of regular deadlines.

Your Full Payment Submission (FPS) should normally be sent to HMRC on or before the date you pay your employees .

PAYE and National Insurance collected through payroll is then usually payable to HMRC by the:

22nd of the following month if paying electronically.

For businesses that qualify to pay PAYE quarterly, different payment dates can apply.

Payroll errors can affect not only your business but also your employees' tax records, pensions and benefits, so this is one area where being organised is particularly important.

Corporation Tax Payment – 9 Months and 1 Day

Limited companies have different deadlines from sole traders.

For most small companies, Corporation Tax must be paid:

9 months and 1 day after the end of the Corporation Tax accounting period.

For example, if your company's year end is:

31 March 2026

the Corporation Tax payment deadline would normally be:

1 January 2027

NOTE: An important point to remember is that the tax is normally due before the Corporation Tax return itself has to be filed .

Corporation Tax Return – 12 Months

Your company's Corporation Tax Return must usually be submitted to HMRC:

12 months after the end of the accounting period.

So, using the same company with a 31 March 2026 year end, the Corporation Tax Return would normally need to be filed by:

31 March 2027

Even if your company has made a loss or has no Corporation Tax to pay, you may still be required to file a Company Tax Return if HMRC has issued a notice requiring one.

Companies House Accounts – Usually 9 Months

Limited companies also need to file annual accounts with Companies House.

For most private limited companies, the deadline is:

9 months after the company's financial year end.

For example:

Company year end: 31 March 2026

Companies House filing deadline: 31 December 2026

Confirmation Statement – Every Year

Every UK limited company must also submit a Confirmation Statement to Companies House.

This confirms important company information such as:

registered office
directors
shareholders
people with significant control
share capital
certain other business information

NOTE: Your Confirmation Statement date is specific to your company, so this is not one universal annual deadline.

It is important not to confuse the Confirmation Statement with your annual accounts. They are separate filing obligations.

Your Company's Deadlines May Be Different

One of the reasons business deadlines can become confusing is that not every business follows exactly the same calendar.

Your deadlines may depend on:

whether you are a sole trader or limited company
your company's financial year end
your VAT quarters
whether you operate payroll
whether you fall within Making Tax Digital
personal Self Assessment circumstances

This is why simply copying dates from another business owner is rarely a good idea.

Missing a Deadline Can Cost You

Leaving things until the last minute can result in:

late filing penalties
late payment penalties
interest
Companies House penalties
HMRC correspondence
cash-flow problems
unnecessary stress

More importantly, repeatedly preparing your accounts at the last minute makes it difficult to use the financial information to actually manage your business.

Your accounts should tell you what is happening in your business — not simply become something you deal with when HMRC asks for them.

A Simple Way to Stay Ahead

A good routine is to keep your bookkeeping updated throughout the year rather than trying to reconstruct everything just before a deadline.

Ideally:

reconcile your bank regularly
upload receipts as you receive them
review outstanding invoices
keep payroll information up to date
set money aside for tax
peak to your accountant before making major financial decisions

NOTE: The earlier we have accurate information, the more opportunity there is to identify problems and consider tax-planning opportunities.

Need Help Keeping Track of Your Business Deadlines?

At Partridge Accountancy Services , we help sole traders and limited companies stay on top of their accounts, VAT, payroll, Corporation Tax, Self Assessment and Making Tax Digital obligations.

Our aim is not simply to file everything on the deadline.

We want our clients to know what is due, when it is due and roughly what they should expect to pay , so there are fewer surprises.

If you would like help getting your business finances organised and making sure important deadlines are not missed, please get in touch with Partridge Accountancy Services .

Partridge Accountancy Services
Helping businesses stay informed, compliant and prepared.

Simple.

Why do I need an Accountant; can't I just do it myself?

Wed, 02 Sep 2026 17:33:33 GMT

Why Doing Your Own Accounts Can Cost More Than Hiring an Accountant

do I need an accountant for my small business?

When you’re running a small business, it’s completely understandable to want to keep costs down.

For many sole traders and small limited companies, one of the first things they consider doing themselves is the bookkeeping and accounts.

After all, accounting software is easier to use than ever, bank feeds can automate transactions, and there are plenty of videos online explaining how to submit returns.

So why pay an accountant?

The problem is that doing your own accounts can sometimes end up costing you far more than the accountant’s fee.

Saving money… or creating a bigger bill?

The biggest misconception is that accounting is simply about adding up your income and expenses and submitting a figure to HMRC.

In reality, good accounting is about making sure that:

you are claiming everything you are legally entitled to claim
expenses are treated correctly
tax reliefs and allowances are not being missed
VAT is calculated correctly
deadlines are met
your business structure is still tax-efficient
you are planning ahead rather than discovering your tax bill after the year has finished.

Sure, you may be perfectly capable of submitting your own tax return.

But the more important question is this:

Are you submitting the most tax-efficient and accurate return possible?

Missing allowable expenses

One of the most common issues we see is business owners simply not claiming everything they are entitled to.

Examples could include:

business mileage
use of your home for business
mobile phone and internet costs
professional subscriptions
software
training
business insurance
accountancy costs
equipment
pension contributions
certain travel or subsistence costs

Not every expense is allowable in every situation, which is precisely why professional advice can be valuable.

Missing £2,000 or £3,000 of legitimate expenses over a year could easily mean paying hundreds of pounds more tax than necessary.

Claiming something incorrectly can be even more expensive

The opposite problem also happens.

Someone may see online that an expense is "tax deductible" and assume it automatically applies to them.

Cars are a good example.

The tax treatment can depend on whether you are a sole trader or limited company, whether the vehicle is purchased personally or through the business, whether it is electric, how it is financed and how much private use there is.

Getting this wrong could result in additional tax, VAT corrections, penalties or interest later.

VAT mistakes can quickly become expensive

VAT is another area where small errors can create surprisingly large problems.

Common issues include:

reclaiming VAT when there is no valid VAT invoice
applying the wrong VAT rate
incorrectly treating purchases from overseas
misunderstanding reverse charge rules
missing VAT on business income
failing to register for VAT when the registration threshold is exceeded

A mistake repeated every month can become a significant correction when HMRC eventually identifies it.

Your time has a value too

There is another cost that business owners often forget:

your time.

Imagine you spend five hours each month dealing with bookkeeping, payroll, VAT and trying to work out whether transactions have been entered correctly.

That is 60 hours per year.

If your time is worth £40 per hour to your business, that represents £2,400 of your time.

Could those 60 hours have been better spent:

finding new customers
completing paid work
improving your services
following up leads
simply having more time away from the business

Sometimes outsourcing accounts isn't just about tax.

It is about allowing the business owner to concentrate on the part of the business that actually makes money.

Accounting software doesn't replace accounting advice

Xero, QuickBooks and other accounting packages are excellent tools.

We use accounting software every day.

But software records the information it is given.

It does not necessarily tell you whether the transaction has been treated in the most appropriate way for your particular circumstances.

Having accounting software is a bit like having a calculator.

It can help you calculate the numbers, but you still need to know which numbers you should be calculating.

You could be missing opportunities to reduce tax

An accountant shouldn't simply tell you what tax you owe.

Where appropriate, they should also help you understand what you can do differently.

Depending on your circumstances, this could involve considering:

salary and dividend planning
pension contributions
timing of purchases
capital allowances
VAT schemes
whether to operate as a sole trader or limited company
remuneration for family members working within the business
director's loan accounts
planning when profits are unusually high

Tax planning generally works best before the end of the financial year.

Once the year has ended, some opportunities may already have disappeared.

Fixing accounts often costs more than preparing them correctly

We regularly speak to business owners who initially prepared everything themselves but later need an accountant to correct it.

Unfortunately, correcting historical bookkeeping, VAT returns or accounts usually involves more work than preparing them correctly from the beginning.

The accountant may need to:

review what has already been submitted
identify errors
reconstruct accounting records
correct bookkeeping
amend returns
correspond with HMRC
potentially calculate penalties or interest

What originally looked like a saving can suddenly become a much larger professional fee.

The cost of getting it wrong

The real cost of DIY accounting isn't necessarily the accounting software subscription.

It could be:

unnecessary tax
missed tax relief
HMRC penalties
late filing charges
interest
incorrect VAT
hours spent fixing mistakes
the stress of trying to understand tax rules while also running a business

For some very small businesses, preparing your own records may work perfectly well.

But as your turnover grows, you register for VAT, employ staff, buy assets, take dividends or your personal tax affairs become more complicated, professional advice becomes increasingly valuable.

Good accountants should save you more than just time

At Partridge Accountancy Services , we don't believe accountancy should simply be about submitting forms to HMRC once a year.

We work with small businesses, sole traders and limited companies to help them understand their numbers, stay compliant and make better financial decisions throughout the year.

Sometimes the biggest saving an accountant provides isn't a clever tax trick.

It's simply making sure you don't make an expensive mistake in the first place.

Need help with your accounts?

If you've been managing your accounts yourself and would like someone to review how you're currently doing things, we'd be happy to have a conversation.

Whether you need ongoing bookkeeping, VAT, payroll, Self Assessment, limited company accounts or simply some advice, Partridge Accountancy Services is here to help.

Partridge Accountancy Services
Helping businesses stay informed, compliant and prepared.

Simple.

UK Small Business Tax Update – September 2026

Wed, 02 Sep 2026 11:43:51 GMT

September 2026 UK small business tax update covering Making Tax Digital, Self Assessment deadlines, Companies House identity verification, employment law changes, dividend tax and the October Budget.

If you run a small business, limited company, are self-employed or receive rental income, there are several important tax and compliance changes to be aware of this autumn.

Here is our September 2026 small business update, including the latest information on Making Tax Digital, Self Assessment, Companies House, payroll, employment law and upcoming tax deadlines.

Making Tax Digital for Income Tax in 2026

Making Tax Digital for Income Tax, often referred to as MTD ITSA, is now mandatory for some sole traders and landlords.

From September 2026, HMRC has started automatically signing up some individuals who should already be within the MTD rules but have not completed the registration themselves.

The current Making Tax Digital thresholds are:

Gross self-employment and property income over £50,000 – MTD applies from 6 April 2026
Gross income over £30,000 – MTD applies from 6 April 2027
Gross income over £20,000 – MTD applies from 6 April 2028

The threshold is based on gross qualifying income before expenses.

PAYE employment income does not count towards the MTD threshold.

If HMRC contacts you to confirm that you have been enrolled into Making Tax Digital, it is important not to ignore the correspondence. You will need suitable accounting software and appropriate digital bookkeeping records.

Next Making Tax Digital Deadline

The next quarterly MTD Income Tax update deadline is:

7 November 2026

This is the second quarterly update for taxpayers already within the new MTD Income Tax regime.

Although HMRC has confirmed that penalties for late quarterly updates will not apply during the first mandatory year, 2026/27, businesses are still expected to maintain digital records and complete the required submissions.

If you are already within Making Tax Digital, now is a good time to make sure your bookkeeping, receipts and bank transactions are fully up to date.

UK Budget 2026 – 28 October

The next UK Budget will take place on:

Wednesday 28 October 2026

The weeks before a Budget often bring significant speculation about possible tax changes.

Business owners should be cautious about making major decisions based purely on newspaper headlines or rumours.

Once the Budget has taken place, we will review the announcements and explain which changes are likely to affect small businesses, company directors, landlords and sole traders.

Companies House Identity Verification

Companies House identity verification is now becoming part of normal company compliance.

Existing directors are required to provide their Companies House personal code when their company reaches the relevant Confirmation Statement filing point.

If you are both a company director and a Person with Significant Control, known as a PSC, separate verification requirements may also apply.

If we prepare your Confirmation Statement for you, we may ask you to provide your Companies House personal code before the filing can be completed.

Employment Law Changes from October 2026

There are also important employment law changes coming into force in October.

From 1 October 2026 , the normal time limit for employees to bring many Employment Tribunal claims will increase from three months to six months.

For employers, this means good HR record keeping is more important than ever.

Businesses should keep clear documentation relating to:

sickness
disciplinary procedures
grievances
dismissals
performance concerns
holiday disputes

Further changes relating to workplace harassment duties are also due from 30 October 2026 .

Employers should consider reviewing their employment policies and procedures before the end of October.

Statutory Sick Pay Changes

Changes to Statutory Sick Pay have applied since April 2026.

SSP is now payable from the first full day of sickness, and the previous lower earnings threshold has been removed.

The current payment is generally the lower of:

80% of average weekly earnings
£123.25 per week

Employers should ensure payroll systems are calculating Statutory Sick Pay correctly.

National Minimum Wage Rates 2026

The current National Minimum Wage rates from April 2026 are:

Age 21 and over – £12.71 per hour
Age 18 to 20 – £10.85 per hour
Under 18 – £8.00 per hour
Apprentice rate – £8.00 per hour

Employers should regularly check that employees are being paid at or above the correct legal minimum.

Dividend Tax Rates for 2026/27

Dividend tax rates increased for the 2026/27 tax year.

The current rates are:

Basic rate taxpayers – 10.75%
Higher rate taxpayers – 35.75%
Additional rate taxpayers – 39.35%

The dividend allowance remains at £500 .

For limited company directors who extract income through a combination of salary and dividends, tax planning is increasingly important.

Pension contributions and salary levels may also form part of a wider tax planning strategy.

Corporation Tax Rates

There has been no change to the main Corporation Tax structure.

The current rates are:

19% for company profits of £50,000 or less
Marginal Relief between £50,000 and £250,000
25% for company profits above £250,000

These thresholds can be reduced where a company has associated companies.

Self Assessment Registration Deadline – 5 October 2026

A particularly important deadline is approaching for anyone who needs to complete a Self Assessment Tax Return for the first time.

You may need to notify HMRC by:

5 October 2026

This could apply if, during the 2025/26 tax year, you:

became self-employed
started receiving rental income
received untaxed income
became liable to Capital Gains Tax
became a company director with additional taxable income

The deadline to submit the 2025/26 Self Assessment Tax Return online and pay any tax due is:

31 January 2027

If you are unsure whether you need to register, it is best to check before the October deadline rather than waiting until January.

Small Business Rates Relief

Businesses affected by the April 2026 business rates revaluation may be entitled to additional support.

Supporting Small Business Relief may help businesses that lost some or all of their Small Business Rate Relief following an increase in their rateable value.

Small Business Rate Relief continues to provide up to 100% relief for qualifying businesses with a rateable value of £12,000 or below, with tapered relief available for qualifying properties with a rateable value up to £15,000.

If your business rates have increased significantly, it may be worth checking whether you qualify for additional relief.

Important Small Business Tax Deadlines

Key dates to remember over the next few months include:

5 October 2026 – Self Assessment registration deadline
28 October 2026 – UK Budget
31 October 2026 – Paper Self Assessment filing deadline
7 November 2026 – Making Tax Digital quarterly update deadline
30 December 2026 – Deadline for eligible tax liabilities to be collected through PAYE coding
31 January 2027 – Online Self Assessment filing and payment deadline

Need Help With Your Business Tax or Accounts?

Tax and accounting rules are becoming increasingly digital and deadlines can easily be missed.

At Partridge Accountancy Services , we help small businesses, sole traders, landlords and limited companies stay on top of their accounting and tax responsibilities.

We can assist with:

Making Tax Digital
Self Assessment Tax Returns
Limited company accounts
Corporation Tax
VAT returns
Payroll
Bookkeeping
Companies House filings
Tax planning

If you are unsure whether any of the September 2026 tax changes or upcoming deadlines affect you, please contact us.

Getting advice early can help avoid unnecessary penalties, last-minute stress and unexpected tax bills.

Partridge Accountancy Services
Helping businesses stay informed, compliant and prepared.

Simple.

What Advantage Is There In Having A Management Account?

Sun, 26 Jul 2026 20:15:13 GMT

What Are the Advantages of Management Accounts?

Many business owners only look closely at their finances once a year, when their annual accounts are prepared.

By that point, however, the information is already historical.

Management accounts give you a much clearer and more up-to-date picture of how your business is performing throughout the year. They help you understand what is working, identify problems early and make better decisions based on real financial information.

For growing businesses, management accounts can be one of the most useful tools available.

What Are Management Accounts?

Management accounts are internal financial reports prepared regularly, usually monthly or quarterly.

Unlike annual statutory accounts, they are not normally submitted to HMRC or Companies House. Instead, they are produced for business owners, directors and managers to help them understand the financial position of the business.

A typical set of management accounts may include:

A profit and loss report
A balance sheet
Cash flow information
Budget comparisons
Sales performance
Expense analysis
Debtor and creditor information
Key performance indicators
Commentary explaining the figures

The reports can be tailored to your business, so you receive the information that is most useful to you.

Understand Whether Your Business Is Profitable

A healthy bank balance does not always mean that a business is making a profit.

Money in the bank may include VAT, unpaid supplier costs, loan funds or amounts that will soon be needed for tax.

Management accounts show whether the business is genuinely profitable by comparing income with the costs of generating that income.

They can help answer important questions such as:

Are sales increasing?
Is gross profit improving?
Are overheads becoming too high?
Which products or services are most profitable?
Is the business performing better or worse than last year?

Without regular financial reporting, these issues can easily go unnoticed.

Identify Problems Early

Annual accounts are often prepared several months after the end of the financial year.

This means a problem may have existed for a long time before it becomes visible.

Monthly or quarterly management accounts can highlight issues much sooner, such as:

Falling sales
Reduced profit margins
Rising costs
Slow-paying customers
Excessive stock levels
Increasing borrowing
Unexpected cash flow pressure

The earlier a problem is identified, the more time you have to take action.

For example, you may decide to increase prices, reduce unnecessary spending, improve credit control or focus on more profitable areas of the business.

Make Better Business Decisions

Good decisions should be based on more than instinct.

Management accounts provide reliable information to support decisions about:

Employing new staff
Purchasing equipment
Opening another location
Increasing prices
Introducing a new product or service
Reducing costs
Investing in marketing
Taking on additional borrowing
Paying dividends
Expanding the business

They allow you to assess whether the business can afford a decision before committing to it.

This does not remove all business risk, but it allows decisions to be made with a much clearer understanding of the likely financial impact.

Improve Cash Flow Management

A profitable business can still experience cash flow difficulties.

This is because profit and cash are not the same thing. A business may have issued invoices and recorded a profit but may still be waiting for customers to pay.

Management accounts can help you understand:

How much cash is available
How much customers owe you
How much you owe suppliers
When major payments are due
Whether future cash shortages are likely
Whether the business can afford planned spending

Better cash flow planning gives you time to prepare for quieter periods, tax bills, large purchases and unexpected costs.

Compare Actual Performance Against Your Budget

Creating a budget is useful, but it becomes much more valuable when actual performance is compared against it.

Management accounts can show:

Whether sales are above or below target
Whether expenses are within budget
Whether profit is in line with expectations
Where unexpected differences have arisen

This is often known as variance analysis.

For example, if sales are strong but profits are lower than expected, the reports may reveal that supplier prices, wages or other operating costs have increased.

This allows you to understand why the business is not performing as planned and decide what needs to change.

Monitor Your Most Important Numbers

Every business has key figures that are particularly important.

These are often referred to as Key Performance Indicators, or KPIs.

Depending on the business, they may include:

Gross profit margin
Net profit margin
Average customer spend
Sales by department
Staff costs as a percentage of turnover
Number of new customers
Customer retention
Debtor days
Stock turnover
Monthly recurring revenue

Management accounts allow these figures to be reviewed regularly.

This helps you focus on the areas that have the greatest effect on the success of your business.

Plan for Tax Liabilities

Tax bills can create significant cash flow pressure if they are not planned for properly.

Regular management accounts can help estimate future liabilities for:

Corporation Tax
VAT
PAYE and National Insurance
Income Tax
Payments on account

While estimates may change before the final tax return is prepared, they can still give you a valuable indication of how much money should be set aside.

This reduces the risk of reaching a payment deadline without enough cash available.

Support Applications for Finance

Banks, lenders and investors may ask for recent financial information before providing funding.

Annual accounts may not give them a sufficiently current picture, particularly when they were prepared several months earlier.

Up-to-date management accounts can demonstrate:

Current profitability
Cash flow performance
The strength of the balance sheet
Business growth
The ability to repay borrowing
The financial effect of future plans

Professional and accurate reports can strengthen a finance application and give lenders greater confidence in the business.

Improve Control Over Business Spending

Small increases in costs can have a significant effect on overall profitability.

Management accounts make it easier to compare expenses from month to month and identify areas where spending is increasing.

You may discover:

Subscriptions that are no longer needed
Supplier prices that have risen
Excessive bank charges
Unprofitable advertising
High staffing costs
Duplicate services
Unexpected operating expenses

Regular review helps prevent unnecessary costs from continuing unnoticed.

Understand Which Areas of the Business Perform Best

A business may appear profitable overall while some departments, services or products are making a loss.

Management accounts can be divided into different categories, such as:

Branches
Departments
Projects
Products
Services
Salespeople
Locations

This can reveal which areas generate the strongest return and which require attention.

You can then make better decisions about where to invest time, money and resources.

Hold Directors and Managers Accountable

Management accounts provide clear evidence of business performance.

When responsibilities are shared between directors, managers or departments, regular reporting can show whether agreed targets are being achieved.

This creates greater accountability and encourages informed discussions about performance.

Instead of relying on opinions, meetings can focus on actual results, identified concerns and practical next steps.

Gain Greater Confidence in Your Business

Many business owners feel uncertain about their finances because they do not have regular access to clear information.

Management accounts can provide reassurance by showing:

Where the business stands
Whether it is profitable
What money is available
What liabilities are approaching
Whether performance is improving
Where action is required

Having accurate information reduces uncertainty and allows you to run your business with greater confidence.

How Often Should Management Accounts Be Prepared?

The most appropriate frequency depends on the size and complexity of the business.

Monthly management accounts

Monthly reports are often suitable for growing businesses, businesses with employees, companies with tight cash flow or those undergoing significant change.

They provide frequent information and allow problems to be identified quickly.

Quarterly management accounts

Quarterly reports may be suitable for smaller or more stable businesses that do not require monthly financial analysis.

They still provide regular insight while reducing the level of administration involved.

The most important point is that the reports are produced frequently enough to support useful decisions.

Are Management Accounts Only for Large Businesses?

No.

Management accounts can be useful for businesses of all sizes.

A small business may benefit from a simple monthly profit and loss report, cash flow review and estimated tax position.

A larger or more complex business may require detailed departmental reporting, budgets, forecasts and performance indicators.

The reports should be proportionate to the needs of the business. They do not need to be unnecessarily complicated to be valuable.

What Makes Good Management Accounts?

Good management accounts should be:

Accurate
Up to date
Easy to understand
Relevant to the business
Consistent from one period to the next
Supported by clear explanations
Delivered in time for decisions to be made

Producing reports is only part of the process.

The real value comes from understanding what the figures mean and using that information to improve the business.

Take Control of Your Business Finances

Management accounts allow you to look forward rather than simply reviewing what happened in the past.

They provide the information you need to manage cash flow, improve profitability, control costs and make confident business decisions.

How Partridge Accountancy Services Can Help

At Partridge Accountancy Services, we prepare clear and practical management accounts to help business owners understand their finances and make informed decisions.

Our support can include:

Monthly or quarterly management accounts
Profit and loss reporting
Balance sheet reviews
Cash flow analysis
Budget comparisons
Tax estimates
Debtor and creditor reporting
Departmental or project analysis
Key performance indicators
A clear explanation of what the figures mean

We do more than simply provide reports.

We help you identify trends, understand potential concerns and decide what action may be needed.

Would you like a clearer understanding of how your business is performing? Contact Partridge Accountancy Services to discuss monthly or quarterly management accounts tailored to your business.

Please Note

This article is intended for general information only and does not constitute personalised financial, tax or business advice.

For that, you will need to contact one of our Accountants directly.

Partridge Accountancy Services
Helping businesses stay informed, compliant and prepared.

Simple.

We wish all our clients a wonderful summer and, as always, thank you for your continued support.

Self Employed (Sole Trader) Or Limited Company?

Sun, 26 Jul 2026 19:44:23 GMT

Self-Employed or Limited Company: Which Is Right for You?

Starting a business is exciting, but one of the first important decisions you will face is how to structure it.

Should you operate as a self-employed sole trader, or should you set up a limited company?

There is no single answer that works for everyone. The right choice will depend on your profits, the risks involved in your work, how you intend to take money from the business and your plans for the future.

Let’s look at the main differences.

What Does Being Self-Employed Mean?

When people say they are “self-employed”, they are usually referring to operating as a sole trader .

As a sole trader, you and your business are legally treated as the same person. You personally own the business, make the decisions and keep the profits after paying tax. However, you are also personally responsible for the business’s debts and liabilities.

Operating as a sole trader is generally the simplest way to start a business.

You will normally need to:

Register with HMRC for Self Assessment
Keep records of your business income and expenses
Submit a Self Assessment Tax Return
Pay Income Tax and National Insurance on your taxable profits

You generally need to register as a sole trader when your gross trading income exceeds £1,000 during a tax year.

The Advantages of Being a Sole Trader

Simple and inexpensive to start

Becoming a sole trader involves less administration than setting up and running a limited company. There are fewer formal filing requirements, making it an attractive option for people starting a small business or testing a new idea.

Less paperwork

You will still need to maintain proper business records and submit your tax information, but the reporting requirements are usually less complicated than those of a limited company.

Easy access to your money

The business profits belong directly to you. You do not need to process a salary, declare dividends or maintain a director’s loan account before using the money personally.

Greater privacy

A sole trader’s annual business accounts are not normally published on the Companies House register.

The Disadvantages of Being a Sole Trader

Personal responsibility for debts

There is no legal separation between you and the business. If the business cannot pay its debts, your personal finances and assets could potentially be at risk.

Tax can increase as profits grow

As your profits increase, operating as a sole trader may become less tax-efficient, depending on your overall income and personal circumstances.

However, forming a limited company does not automatically guarantee a lower tax bill. A proper comparison should consider Corporation Tax, salary, dividends, National Insurance, accountancy costs and how much money you need to withdraw personally.

It may appear less established

Some customers, suppliers, agencies and lenders prefer to deal with limited companies. This may be particularly relevant when tendering for larger contracts or working with corporate clients.

What Is a Limited Company?

A limited company is a separate legal entity from the person who owns or manages it.

The company has its own finances, obligations and responsibilities. It normally pays Corporation Tax on its taxable profits, while its directors and shareholders may pay personal tax on money they receive from the company.

A limited company may offer greater protection because, in most circumstances, the owners are not personally responsible for the company’s debts. However, this protection is not absolute, particularly where personal guarantees, misconduct or failures in directors’ duties are involved.

Running a limited company also brings additional responsibilities. Directors are legally responsible for maintaining company records, preparing annual accounts, submitting a Company Tax Return, paying Corporation Tax and ensuring the required information is filed with Companies House.

The Advantages of a Limited Company

Limited liability

Because the company is a separate legal entity, your personal assets may receive greater protection if the business experiences financial difficulties.

Potential tax-planning opportunities

A limited company may provide more flexibility over how and when income is taken.

Directors may receive money through a combination of salary and dividends, where appropriate. Dividends can only be paid from available company profits and must be formally declared and recorded.

The most suitable approach will depend on the company’s profits, the director’s other income and current tax legislation.

A more established business image

Operating through a limited company can create a more professional or established impression. It may also make it easier to bring in shareholders, transfer ownership or sell the business in the future.

Ability to retain profits

You do not necessarily have to withdraw all the company’s profits personally.

Some profits can be retained within the company to support future investment, provide working capital or fund business growth. Tax advice should be taken before deciding how much money to retain or withdraw.

Protection of the company name

A limited company’s registered legal name is protected, meaning another UK company cannot register exactly the same name.

The Disadvantages of a Limited Company

More administration

A limited company must maintain proper accounting records and comply with both HMRC and Companies House requirements.

This may include:

Annual accounts
A Company Tax Return
Corporation Tax payments
A yearly confirmation statement
Payroll reporting
Dividend paperwork
Records of directors, shareholders and people with significant control

Directors remain legally responsible for ensuring these obligations are met, even when an accountant has been appointed to assist them.

Higher accountancy and operating costs

Limited company accounts and tax returns are more complicated, so professional fees are generally higher than they would be for a straightforward sole trader.

There may also be additional costs for payroll, bookkeeping, Companies House submissions and company secretarial support.

The company’s money is not automatically your money

Money held in the company’s bank account belongs to the company.

Directors must take money out correctly, usually through salary, dividends, repayment of expenses or a properly recorded director’s loan. Taking money without correctly recording it can create tax complications.

Less privacy

Certain company information is publicly available through Companies House, including the company’s registered office, directors, annual accounts and confirmation statements.

Which Structure Pays Less Tax?

This is often the first question business owners ask, but tax should not be the only consideration.

Historically, limited companies were often assumed to be more tax-efficient once profits reached a particular level. However, changes to Corporation Tax, dividend taxation and National Insurance mean that the answer is now more complicated.

The result will depend on factors including:

The level of annual profit
How much money you need to withdraw
Whether you have another job or source of income
Whether another person will own shares
Whether profits will be retained in the business
Pension contributions
Student loan repayments
Child Benefit or childcare considerations
The additional cost of running a company

A personalised calculation is the best way to compare the two options properly.

When Might Being a Sole Trader Be Best?

Operating as a sole trader may be suitable when:

You are starting a new or relatively small business
Your expected profits are modest
The business carries limited financial risk
You want simple administration
You need to withdraw most of the profits personally
You are testing whether the business idea will work
You do not yet need investors or shareholders

You can begin as a sole trader and incorporate later if the business grows or your circumstances change.

When Might being a Limited Company Be Best?

A limited company may be more suitable when:

Your profits are increasing
You want greater separation between personal and business finances
Your work carries a higher level of commercial risk
You plan to retain profits for future growth
You want to bring in shareholders
You intend to build and eventually sell the business
Your clients prefer or require you to operate through a company
A detailed tax comparison shows that incorporation would be beneficial

What About Expenses?

Both sole traders and limited companies can claim legitimate business expenses, provided the costs meet the relevant tax rules.

However, the treatment of certain expenses can differ depending on the business structure. A cost that is allowable for a limited company may be treated differently for a sole trader, particularly where there is mixed business and personal use.

Keeping accurate digital records and separating business transactions from personal spending will make the accounting process much easier, regardless of which structure you choose.

Can I Change from Sole Trader to Limited Company Later?

Yes. Many businesses begin as sole traders and incorporate once their profits, risks or commercial needs increase.

However, moving to a limited company is more than simply opening a new bank account. You may need to transfer contracts, equipment, stock, employees, VAT registrations and other business assets to the new company.

There may also be tax consequences, so the change should be carefully planned.

So, Which Option Is Right for You?

Choose self-employed sole trader when simplicity, flexibility and lower administration are your main priorities.

Consider a limited company when you need greater legal separation, want to retain profits, plan to grow or could benefit from the additional tax-planning opportunities.

Most importantly, do not create a limited company simply because someone has told you that it will save tax. The right answer can only be determined by reviewing your actual figures and personal circumstances.

How Partridge Accountancy Services Can Help

At Partridge Accountancy Services, we help sole traders and limited companies understand their obligations, organise their finances and choose the most appropriate structure.

We can:

Compare the estimated tax position of sole trader and limited company structures
Help you register as self-employed
Form and register your limited company
Set up Xero and digital bookkeeping
Manage payroll, Corporation Tax and Companies House requirements
Prepare your annual accounts and tax returns
Help you plan the move from sole trader to limited company

Choosing the right structure at the right time can protect your business, reduce unnecessary administration and help you plan confidently for future growth.

Thinking about becoming self-employed or setting up a limited company? Contact Partridge Accountancy Services for practical, straightforward advice based on your individual circumstances.

PLEASE NOTE

This article provides general information only and should not be treated as personalised tax or legal advice. Tax rules and individual circumstances can change, so please call us for professional advice before making a decision.

Partridge Accountancy Services
Helping businesses stay informed, compliant and prepared.

Simple.

Submitting Receipts To Your Accountant Via Xero

Fri, 24 Jul 2026 01:07:13 GMT

How to successfully Submit Your Receipts and Invoices to Your Accountant Using Xero to avoid receipt rejections and queries.

Hello again!

To be fair, this happens a lot less than we expect, but still, we have a lot of new Clients coming on board via MTD and this is all a little bit new for some, so thought it may be useful to have a reference we can guide new clients to on the site. :)

Please upload your receipts and purchase invoices regularly rather than waiting until the end of the quarter or tax year; they really do pile up and get lost to the mists of time (and under car seats) unless kept on top of!

We put time aside every day to check for your receipts so we can chip away at those reconciliations; the more receipts we have against transactions the happier HMRC will be with the Accounts we are submitting to them and for us as Accountants its a pretty exciting experience to see them come in (Yes, a little sad, I know).

But if it feels like a boring task after a long day at work, just imagine the unbridled joy on our little faces when we receive them; surely that's a great motivator isn't it?

OK.

Its pretty simple once you have processed a few and will quickly become second nature.

Using the Xero Accounting mobile app

Download the Xero Accounting app from the Apple App Store or Google Play Store.
Sign in using the email address and password connected to your Xero account.
Select the correct business if you have access to more than one Xero organisation.
Tap the “+” button.
Select “Receipt” or “Upload receipt” .

Take a clear photograph of the receipt using your phone’s camera.

IMPORTANT

Before uploading, check that the entire receipt is visible and contains the following information

Supplier’s name

Date of purchase

Total amount paid

VAT amount (where applicable)

Description of the goods or services purchaed

A receipt with payment amount and supplier only cannot be coded without details of the date andgoods or services provided.

Enter or check the transaction details requested by Xero.

Add a short description explaining what the purchase was for, particularly where the business purpose may not be obvious.

Save or submit the receipt.

The receipt will then be available in Xero for your very pleased accountant or bookkeeper to review and match against the relevant bank transaction. Xero’s mobile app supports uploading receipts and creating purchase transactions from them.

Uploading receipts from a computer

You can also upload receipts and invoices through Xero using your computer:

Sign in to your Xero account
Open your business organisation
Go to the relevant bills, purchases or files section
Select the option to upload a document/picture
Choose the receipt or invoice saved on your computer
Add a description or any relevant information
Save the document/picture

Xero allows documents to be photographed, uploaded or emailed into the accounting records.

Important points

Please submit one receipt or invoice per photograph wherever possible.
Make sure the photograph is clear and not blurred, dark or cropped.
Do not upload card-payment slips without the corresponding itemised receipt.
Please include invoices received by email as well as paper receipts.
Do not upload personal expenses unless they were paid personally on behalf of the business .
Add a note where the business purpose is unclear, such as meals, travel, gifts or mixed personal and business purchases.
Keep the original document until you are satisfied that the image has been uploaded successfully and correctly.
Upload receipts regularly so that your bookkeeping and quarterly MTD records remain up to date and as much evidence as possible is presented.

Providing clear and complete receipts (obtaining receipts that clearly state the VAT amount wherever possible, especially if you are VAT registered and the purchases are high value) really helps us process your bookkeeping accurately and identify any VAT or tax relief available to you and your business.

I hope this is useful; please do give us a call if you need further assistance.

Partridge Accountancy Services
Helping businesses stay informed, compliant and prepared.

Simple.

We wish all our clients a wonderful summer and, as always, thank you for your continued support.

What Is MTD And How Do I Know If I Need To Enrol?

Thu, 23 Jul 2026 23:06:50 GMT

Making Tax Digital for Income Tax – Key Information

Hello again!

This will hopefully answer some of the questions we often get about the new MTD (Making Tax Digital) roll out.

We hope this information is useful.

As always we are just a telephone call away if you have any further questions regarding MTD.

Who must use MTD for Income Tax?

You must use Making Tax Digital for Income Tax if:

You are a sole trader, a landlord, or both .
Your total gross income from self-employment and property exceeds the relevant threshold.
You are registered for Self Assessment and have a National Insurance number.
Your qualifying income is assessed before deducting expenses, allowances or tax.

Limited companies, partnerships and individuals whose only income is from employment or pensions are not currently included in the first phase.

When does MTD become compulsory?

From 6 April 2026: those with qualifying income of more than £50,000 , based on the 2024/25 tax return.
From 6 April 2027: those with qualifying income of more than £30,000 , based on the 2025/26 tax return.
From 6 April 2028: those with qualifying income of more than £20,000 , based on the 2026/27 tax return.

It remains the taxpayer’s responsibility to check whether they must join, even if they do not receive a letter from HMRC.

What income counts?

The threshold is based on the combined gross income from:

Sole-trader businesses.
UK property income.
Overseas property income.

This is the total income received before expenses are deducted .

Certain types of income do not count, including:

Employment income.
Pension income.
Dividends and savings interest.
Partnership income.
Income fully covered by Rent a Room relief.
Certain qualifying care income.

What will taxpayers need to do?

Under MTD for Income Tax, taxpayers (or their agents) must:

Keep digital records of business and property income and expenses.
Use HMRC-recognised MTD-compatible software (We recommend Xero).
Submit quarterly updates to HMRC.
Submit an end-of-year tax return through compatible software.
Pay any tax due by the normal Self Assessment payment deadline.

The quarterly updates provide HMRC with totals for income and expenses recorded during each quarter. They are not final tax returns, and accounting or tax adjustments can still be made at the end of the year.

Quarterly update deadlines

For most taxpayers (But not all), the standard deadlines will be:

7 August – first quarterly update.
7 November – second quarterly update.
7 February – third quarterly update.
7 May – fourth quarterly update.

For the 2026/27 tax year, the first quarterly update is due by 7 August 2026 .

What if someone has more than one business or property?

Digital records must be maintained separately for each relevant source of income , such as:

Each sole-trader business.
UK property income.
Overseas property income.

The compatible software will use these records to prepare the required quarterly updates.

What happens if my income later falls below the threshold?

Joining MTD does not necessarily mean that a taxpayer must remain within it permanently.

If qualifying income falls below the relevant threshold for three consecutive tax years , the taxpayer may choose to leave MTD for Income Tax. They may also choose to continue voluntarily.

Exemptions

Some taxpayers may be exempt from MTD for Income Tax.

An exemption may be available where it is not reasonable or practical for the person to use digital tools because of circumstances such as:

Age.
Disability.
Religious beliefs.
Location or unreliable internet access.
Other circumstances causing digital exclusion.

Some exemptions apply automatically, while others require an application to HMRC. Even when exempt from MTD, the taxpayer must continue reporting their income through Self Assessment.

Penalties

For taxpayers required to join from 6 April 2026, HMRC has confirmed that penalty points will not be issued for late quarterly updates during the first MTD tax year, 2026/27.

However, normal penalties may still apply for:

Late submission of the end-of-year tax return.
Late payment of the tax liability.

In summary

MTD for Income Tax requires affected sole traders and landlords to:

Maintain digital accounting records.
Use compatible software.
Report income and expenses to HMRC every quarter .
Complete an end-of-year tax return .
Continue paying Income Tax through the usual Self Assessment system.

Preparing early and choosing suitable software will help make the transition as straightforward as possible.

Partridge Accountancy Services
Helping businesses stay informed, compliant and prepared.

Simple.

We wish all our clients a wonderful summer and, as always, thank you for your continued support.

PAS Small Business Update July 2026

Thu, 23 Jul 2026 22:25:05 GMT

PAS Small Business Update - July 2026

We hope you and your team are managing to stay cool in this very warm weather we are having!

Well, here it is, another Newsletter.

We are hoping we can make this a monthly thing so keep an eye out for more from us!

Please also, (if you are reading this in August of 2026) ensure you scroll to the bottom of this email for an important update from Carla!

Since the beginning of the new tax year, several important changes have taken effect for sole traders, landlords, limited companies and employers. Here is our straightforward summary of what has changed, what is coming next and what you may need to do.

Making Tax Digital for Income Tax has begun

Making Tax Digital for Income Tax became compulsory from 6 April 2026 for sole traders and landlords whose combined qualifying income from self-employment and property was more than £50,000 during the 2024/25 tax year .

The £50,000 threshold is based on gross income before expenses, rather than taxable profit.

Those affected must:

maintain digital accounting records;
use MTD-compatible software; and
send quarterly updates to HMRC.

The deadline for the first quarterly update is 7 August 2026 , followed by further deadlines on 7 November 2026, 7 February 2027 and 7 May 2027.

HMRC has confirmed that it will not apply penalty points for late quarterly updates during the first year of MTD. However, penalties can still apply where a tax return or tax payment is late.

PAS reminder: Even where HMRC has not written to you, it remains your responsibility to establish whether MTD applies. Please contact us if your combined self-employment and property income exceeded £50,000 and you have not yet made arrangements.

Additionally, If you, as a current PAS client, know somebody who is still unsure about MTD and think they may benefit from working with us at PAS, give them our contact details and ask them to let us know who referred them; If they go on to sign up with us for MTD services we will reward you for every individual converted recommendation with a £25 Amazon gift Voucher!

Self Assessment payment deadline: 31 July

The second Self Assessment payment on account for 2025/26 is due by 31 July 2026 .

Payments on account are normally two advance payments towards the following year’s tax liability, with one due in January and the second in July.

You may be able to reduce your payments on account where your profits or other taxable income have fallen. However, the reduction must be reasonable because HMRC can charge interest if the payments are reduced too far.

Please do not assume that nothing is payable simply because you have not received a reminder from HMRC.

PAS reminder: Please check your HMRC account or contact us before the deadline if you are unsure how much you need to pay.

Minimum wage and mileage rates have increased

The following hourly minimum wage rates have applied since 1 April 2026 :

Age 21 and over: £12.71
Age 18 to 20: £10.85
Under age 18: £8.00
Apprentice rate: £8.00

Mileage rates have also increased from 1 April 2026 from 0.45p per mile to 0.55p per mile.

PAS reminder: Employers should check more than just the hourly rate shown on a payslip. Unpaid working time, deductions from wages and additional time spent opening, closing, travelling or completing training can sometimes cause the effective hourly rate to fall below the legal minimum. For further advice, or to discuss a package that includes payroll services, give us a call - we are here to help.

Statutory Sick Pay has changed

From 6 April 2026 , Statutory Sick Pay (SSP) became available from the first full qualifying day of sickness. The previous three waiting days have been removed.

The lower earnings threshold has also been removed, meaning more lower-paid employees may now qualify.

The weekly SSP rate is the lower of:

£123.25 per week ; or
80% of the employee’s average weekly earnings .

Employers cannot reclaim Statutory Sick Pay from HMRC.

PAS recommendation: Sickness policies, employment contracts and payroll procedures should be reviewed to make sure they reflect the new rules.

New day-one family leave rights

Employees can now give notice to take Paternity Leave and Unpaid Parental Leave from their first day of employment.

The service and earnings conditions for receiving Statutory Paternity Pay have not been removed, so an employee may qualify for the leave without necessarily qualifying for statutory pay.

PAS Recommendation: Employers should ensure that managers and payroll teams understand the difference between an employee’s entitlement to leave and their entitlement to statutory pay.

Companies House identity verification

Companies House identity verification is now a legal requirement for directors and people with significant control, known as PSCs.

Existing directors will generally need to provide their personal Companies House code when the company files its next confirmation statement. PSCs may also have a separate 14-day period in which to provide their verification details.

Identity verification can be completed directly through GOV.UK One Login or through an Authorised Corporate Service Provider, such as a registered accountant.

PAS recommendation: Please do not leave verification until the day your confirmation statement is due. Where a company has several directors or shareholders, each relevant individual may need to complete their own verification. Need further clarification? Give us a call!

The joint company accounts and tax return service has closed

If you are already signed up as a Client with PAS, you are already compliant.

However, the old joint HMRC and Companies House online filing service closed on 31 March 2026 .

Companies filing their own Corporation Tax returns must now use suitable commercial software to submit the Company Tax Return to HMRC.

For the moment, some companies can still file their annual accounts separately through Companies House WebFiling or on paper. However, further changes are on the way.

From 1 April 2028 , all UK companies will be required to file their accounts using commercial software. Small companies and micro-entities will also need to submit a profit and loss account, although they will be able to apply for this information not to be displayed publicly. Abridged accounts will no longer be available.

PAS reminder: If you, as a PAS client, know somebody who is still managing their own accounts (or are considering changing Accountant) that you think may benefit from working with us at PAS, give them our contact details and ask them to quote your name. If they sign up with us we will reward each and every converted recommendation with a £25 Amazon gift Voucher!

Further employment changes are coming in October

Several additional employment-law changes are planned from 1 October 2026 . These include:

extending the normal time limit for most Employment Tribunal claims from three months to six months;
strengthening employers’ responsibilities to prevent sexual harassment; and
introducing stronger consultation requirements for businesses that distribute tips and service charges.

Hospitality businesses will need to consult workers when preparing or changing their written tipping policies.

PAS recommendation: Employment contracts, staff handbooks, harassment policies and tipping arrangements should be carefully reviewed before October.

Business-rates support for pubs and music venues

Eligible pubs and live music venues in England can receive a 15% reduction in their business-rates bill for the 2026/27 financial year .

On 23 July 2026 , the government also announced a further 20% business-rates reduction for eligible pubs, clubs and live music venues from April 2027.

PAS recommendation: Restaurants, cafés, hotels and nightclubs are not automatically included within the existing pubs and live music venues relief, so businesses should check their individual position with their local authority.

Looking ahead

With a new government now in place, further tax and business announcements are likely over the coming months.

Partridge Accountancy Services will continue monitoring developments from HMRC, Companies House and the government. We will keep our clients informed of any changes we come across that may affect their businesses, employees or personal tax positions via email and/or via our website at www.partridgeaccountancy.co.uk .

Finally!

A summer holiday note from Carla

Carla will be visiting family and working from Brazil from 2 to 28 August 2026 .

Partridge Accountancy Services will remain open during this period and calls can be made as usual into the office landline number and will be transferred to Carla via a VoIP Connection at no additional charge to you, and of course, there is always webcam and WhatsApp if you need a face-to-face chat.

You may receive emails from Carla at unusual times because of the time difference and responses may not be as quick as usual (Brazil is 4hrs behind UK time - Calls are best placed to Carla after 12 noon UK time). We apologise for any inconvenience caused.

We will have a house sitter while we are away, but the home office will be unavailable for visits during August as Clare will be working from home

Partridge Accountancy Services
Helping businesses stay informed, compliant and prepared.

Simple.

We wish all our clients a wonderful summer and, as always, thank you for your continued support.