Essential UK accountancy terms, explained in plain English.

• Operate PAYE on every payroll run with Real Time Information (RTI) submissions due on or before payday.
• Keep employee starters, leavers and benefits (P11D) details up to date so tax codes remain accurate.
• Reconcile monthly Employer Payment Summary (EPS) values against HMRC and plan for payments by the 22nd (electronic) deadline.

Source: HMRC: PAYE and payroll for employers

• Contractors must verify subcontractors with HMRC and deduct 20% (registered) or 30% (unregistered) tax unless gross status applies.
• Monthly CIS returns are due by the 19th of the following month and should reconcile payments, materials and deductions.
• Statements must be issued to subcontractors, and deductions can usually offset against PAYE liabilities for companies registered under CIS.

Source: HMRC: What you must do as a CIS contractor

• VAT: MTD applies when taxable turnover exceeds the £90,000 registration threshold (increased from £85,000 on 1 April 2024); digital records and compatible software are required for returns.
• Income Tax Self Assessment: from April 2026, landlords and sole traders with £50,000+ qualifying income must send quarterly updates; the threshold falls to £30,000 from April 2027.
• Plan software and bookkeeping processes early to avoid rushed migrations and penalties for late digital filings.

Source: HMRC: Making Tax Digital for Income Tax

• A merged R&D scheme now broadly aligns SME and RDEC rules for accounting periods beginning on or after 1 April 2024, with an enhanced rate for R&D intensive SMEs retained.
• First-time claimants must submit an Additional Information Form (AIF) before filing the corporation tax return to avoid rejection.
• Qualifying cost categories remain specific—tracking staff, consumables and subcontracted R&D accurately supports defendable claims.

Source: HMRC: Research and Development (R&D) tax relief

• Registration is compulsory once VAT-taxable turnover exceeds £90,000 in any rolling 12-month period, or you expect to breach it within the next 30 days.
• You can register voluntarily below the threshold to reclaim input VAT — often worthwhile if most of your customers are themselves VAT-registered.
• Once registered you must keep digital records and file MTD-compatible returns, and can choose a scheme such as Standard, Flat Rate or Cash Accounting.

Source: HMRC: When to register for VAT

• The small profits rate is 19% where taxable profits are £50,000 or less; the main rate is 25% where profits exceed £250,000.
• Between £50,000 and £250,000, marginal relief tapers the effective rate up from 19% towards 25%.
• The £50,000 and £250,000 limits are shared between associated companies and pro-rated for accounting periods shorter than 12 months.

Source: HMRC: Corporation Tax rates and reliefs

• The tax-free dividend allowance is £500 for 2024/25 onwards; dividends above it are taxed at 8.75% (basic), 33.75% (higher) and 39.35% (additional rate).
• Dividends can only be paid from retained post-tax profits and should be supported by board minutes and dividend vouchers.
• A salary-plus-dividend mix is often more tax-efficient for owner-directors than salary alone — the optimal split depends on profits and your other income.

Source: HMRC: Tax on dividends

• IR35 applies when you would be an employee if you worked for the client directly, ignoring your limited company (“inside IR35”).
• For work with medium and large private-sector clients and all public-sector bodies, the client decides your status and may deduct tax at source.
• Genuine control, the right of substitution and financial risk support an “outside IR35” position — keep contracts and actual working practices aligned.

Source: HMRC: Understanding off-payroll working (IR35)

• You usually need to file if you're self-employed, a director with untaxed income, a landlord, or have higher untaxed income.
• Online returns and the balancing payment are due by 31 January after the tax year ends; register by 5 October if it's your first return.
• Payments on account — advance instalments towards next year's bill — fall due on 31 January and 31 July.

Source: HMRC: Self Assessment tax returns

• If your Self Assessment bill exceeds £1,000 (and under 80% is collected at source), HMRC requires two payments on account, each 50% of the prior year's tax.
• They're due 31 January and 31 July; the first often surprises new taxpayers because it lands alongside the balancing payment.
• If your income falls you can apply to reduce them — but cutting them too far triggers interest, so it's worth modelling first.

Source: HMRC: Understand your Self Assessment bill

• The Annual Investment Allowance gives 100% relief on up to £1,000,000 of qualifying plant and machinery each year.
• Companies may also claim full expensing on qualifying new plant and machinery, deducting the whole cost in the year of purchase.
• Cars, buildings and some fixtures follow different rules — writing-down allowances or the structures and buildings allowance.

Source: HMRC: Claim capital allowances

• Expenses must be incurred wholly and exclusively for the business — typical examples are stock, travel, equipment, insurance and professional fees.
• Sole traders can use simplified flat-rate amounts for vehicles, working from home and living on business premises.
• Client entertaining is generally not deductible, and any private-use element of a cost must be apportioned out.

Source: HMRC: Expenses if you're self-employed

• Benefits such as company cars, private medical cover and beneficial loans are taxable and traditionally reported on a P11D after the tax year.
• Employers pay Class 1A National Insurance on most benefits; the P11D(b) return and payment are due by 6 July and 22 July respectively.
• Many employers now payroll benefits instead, taxing them in real time through payroll rather than via P11D.

Source: HMRC: Expenses and benefits for employers

• You must automatically enrol employees aged 22 to State Pension age earning over £10,000, and pay into their pension.
• Minimum total contributions are 8% of qualifying earnings, of which at least 3% must come from the employer.
• Employers re-enrol eligible staff roughly every three years and submit a declaration of compliance to The Pensions Regulator.

Source: GOV.UK: Workplace pensions for employers

• It confirms your directors, shareholders, registered office, SIC codes and people with significant control are up to date.
• It's due at least once a year, within 14 days of the review date, even when nothing has changed — and is separate from your annual accounts.
• Missing it can lead to the company being struck off, so we diarise and file it on clients' behalf.

Source: Companies House: Confirmation statement

• CGT applies to gains on assets such as shares, business assets and second properties, above the annual exempt amount (£3,000 for 2024/25).
• Rates depend on the asset and your income; Business Asset Disposal Relief can reduce the rate to 10% on qualifying business sales up to a lifetime limit.
• Gains on UK residential property must be reported and the tax paid within 60 days of completion.

Source: HMRC: Capital Gains Tax