Welcome Pack 2025

Welcome to My Accountant Friend!

Congratulations! You’ve taken the plunge and now fully part of the MAF family. Whether you’re a seasoned entrepreneur or this is your first rodeo, we promise to keep the accountancy jargon to a minimum (unless you enjoy tax codes, in which case, let’s be friends). This guide will walk you through the key things you need to know throughout your trading year. Some bits are important now, and others can wait until later—kind of like filing your tax return (but please don’t wait too long on that one!).

The Basics – Titles That Make You Sound Important

Trading through a limited company means you now have two key roles:

1. Director – The clue is in the name. You direct the company, ensuring it trades legally and in the best interests of the shareholders. As a reward for your hard work, you get a salary. More on that later.
2. Shareholder – You’ve invested time (and possibly money) into the company, and in return, you get dividends—potentially a very tax-efficient way to get paid.

Salary – Because You Deserve to Get Paid

If you want to pay yourself a salary (which we assume you do), your company needs to be registered for PAYE with HM Revenue & Customs (HMRC). This means:

• HMRC will give your company a reference number.
• Your company will deduct tax and National Insurance (NI) from any salaries paid.

As a director, your PAYE responsibilities include:

1. Deducting and paying Income Tax and NI to HMRC.
2. Filing Real-Time Information (RTI) reports.
3. Reporting benefits & expenses (P11D) by 6th July after the end of the tax year.

Don’t worry—our fee covers reminders and filing your returns, so you can focus on running your business instead of stressing over tax deadlines.

VAT – A Necessary Evil?

VAT is the tax that gets added to your invoices. Currently, the standard rate is 20%.

Example: If your invoice is £2,000, you add £400 VAT, making the total bill £2,400.

You must register for VAT if your annual turnover exceeds £90,000 (as of 2024). However, even if you earn less, registering could still be beneficial.

The VAT Flat Rate Scheme

This scheme simplifies VAT and could save you money—typically around 2% of turnover. To qualify, your annual taxable turnover must be below £150,000.

VAT responsibilities include:

1. Filing a VAT return every 3 months (electronically, of course).
2. Paying VAT owed within 5 weeks of the return period.
3. We highly recommend setting up a Direct Debit to avoid any accidental late payments.

Again, we’ve got you covered—our system calculates everything for you, and submission is as easy as clicking a button.

Corporation Tax – The One You Can’t Escape

Once your company is registered, HMRC will send you a letter to register for Corporation Tax (CT). Currently, the tax rate varies depending on your profits:

• Profits up to £50,000 – 19%
• Profits over £250,000 – 25%
• Between these? Marginal relief and this is best avoided!

Corporation Tax responsibilities:

1. File a Corporation Tax return each year (along with your accounts) within 12 months of your financial year-end.
2. Pay Corporation Tax within 9 months + 1 day of your financial year-end.

We handle your filings, so just sign where needed, and you’re good to go.

Insurance – Because Life Happens

Some insurance is optional; others might be required depending on your client contracts:

• Employer Liability Insurance – Needed if you have employees (but not if you’re the only worker and own at least 50% of the company).
• Public Liability Insurance – Covers injury or damage to third parties caused by your business.
• Professional Indemnity Insurance – Protects you against financial loss claims due to mistakes or negligence.

We don’t provide insurance, but our highly recommended Insurance company does, here.

Accounting & Bookkeeping – Keeping HMRC Happy

To get paid, you need to issue sales invoices that include:

1. Company name, address, and registration number.
2. VAT number (if registered).
3. Invoice date and number.
4. Breakdown of services provided.

Our systems will ensure you are fully legal and avoid any unnecessary headaches from HMRC.

Expenses – What Can You Claim?

Expenses must be “wholly and exclusively” for business purposes. Here are some common ones:

✔ Salaries & Employer NI Contributions
✔ Employer pension contributions
✔ Business travel & accommodation
✔ Subsistence when working away
✔ Accountancy fees (obviously)
✔ Mobile phone (if in the company’s name)
✔ Home office allowance (£6/week, no receipts required)
✔ Business software, subscriptions & training
✔ Business entertaining (but not client entertainment)

For any pension or relevant life advice please contact our superb IFA here.

Salary & Dividends – The Golden Combo

A combination of salary and dividends is usually the most tax-efficient way to pay yourself.

• Salary – Keeps you within the NI system and qualifies you for a state pension.
• Dividends – Paid from company profits after tax. For 2024/25, the tax-free dividend allowance is £500, after which:
  • Basic rate taxpayers pay 8.75%
  • Higher rate taxpayers pay 33.75%
  • Additional rate taxpayers pay 39.35%

Dividends can only be declared if your company is profitable, so keep your bookkeeping up to date!

Important Deadlines – Mark Your Calendar!

Companies House & HMRC Deadlines

• Financial Accounts – Due 21 months after incorporation.
• Confirmation Statement – Due annually, 28 days after your incorporation date.
• Corporation Tax – Due 9 months + 1 day after the year-end.
• VAT Returns – Filed and paid 1 month + 7 days after the quarter-end.
• P11D Forms – Due by 6th July after the tax year.
• PAYE/NIC Payments – Due 22nd of each month/quarter.
• Class 1A NIC (on benefits) – Due 22nd July each year.

We’ll send reminders so you don’t miss a thing!

That’s it! You’re now armed with the knowledge to navigate your new business. Don’t worry—My Accountant Friend is here to help every step of the way.

If in doubt, just ask—we promise we won’t bore you with tax talk (unless you secretly love it).