AMH Accounts Resource Centre
Welcome to Allen Mills Howard’s resource centre. This is your hub for all the latest news and updates on Manchester’s Accounting and Business community. Read on for informative articles, guides and FAQs on SME accountancy, tax, VAT, and limited company affairs.
Blogs
Making Tax Digital: A Complete Guide for UK Businesses
All VAT-registered businesses in the UK must comply with Making Tax Digital (MTD), HMRC’s initiative...
Sole Trader vs Limited Company: Which Is Best for Your Small Business?
Sole Trader vs Limited Company: Pros and Cons Explained When you’re running your own business,...
Tax & Accounting FAQs
What is a sole trader?
A sole trader is a self-employed individual who owns and operates their business. It is the simplest business structure in the UK, with fewer administrative and reporting requirements than a limited company. As a sole trader, you keep all profits after tax but remain personally responsible for any business debts or liabilities.
Do I need an accountant as a sole trader?
No, there is no legal requirement to use a sole trader accountant. However, professional accounting support can save time, reduce stress, ensure your Self Assessment tax returns are accurate and help identify opportunities to improve tax efficiency.
What records do I need as a Sole Trader?
Sole traders should keep accurate records of all income, expenses, invoices, receipts and business transactions. HMRC generally requires records to be retained for at least five years after the relevant Self Assessment submission deadline.
How much tax does a sole trader pay?
Sole traders typically pay Income Tax and National Insurance Contributions on their business profits. The amount payable depends on your total income and personal circumstances. Professional tax planning can help ensure you’re paying the correct amount while claiming all available allowances and expenses.
Can I claim expenses as a sole trader?
Yes. Sole traders can usually claim allowable business expenses that are incurred wholly and exclusively for business purposes. Common examples include office costs, travel, equipment, software subscriptions, professional fees and marketing expenses.
Do I need an accountant for my business?
While there is no legal requirement to appoint an accountant, most businesses benefit significantly from professional support. A specialist business accountant can help with compliance, tax planning, payroll, bookkeeping and financial decision-making, while reducing the risk of costly mistakes.
What records should my business keep?
Businesses should maintain accurate records of income, expenses, invoices, receipts, payroll and VAT transactions. Good record-keeping supports compliance and provides invaluable insight into business performance.
Do I need to register for VAT?
VAT registration is usually required once your taxable turnover exceeds the current HMRC threshold. Some businesses choose to register voluntarily before reaching the threshold. We can also advise whether registration is appropriate and manage the process on your behalf.
What expenses can a business claim?
Businesses can usually claim expenses which are incurred wholly and exclusively for business purposes. This includes things like software, travel, professional fees, office costs, equipment and marketing expenditure. AMH accounts can help ensure you’re claiming everything you’re entitled to.
Can a sole trader employ staff?
Sole traders should keep accurate records of all income, expenses, invoices, receipts and business transactions. HMRC generally requires records to be retained for at least five years after the relevant Self Assessment submission deadline.
What is Making Tax Digital for Income Tax?
Making Tax Digital for Income Tax Self Assessment (MTD ITSA) is HMRC’s initiative to modernise the UK tax system. Eligible sole traders and landlords must maintain digital accounting records and submit regular updates using compatible software. Allen Mills Howard can help ensure you remain fully compliant.
What liability does a sole trader have?
Unlike a limited company, a sole trader does not benefit from limited liability. Legally, the individual and the business are considered the same entity, meaning you are personally responsible for any debts, financial obligations or legal claims arising from the business.
Should I remain a sole trader or go limited?
The right structure depends on your circumstances, income and future plans. While sole traders benefit from simplicity and flexibility, limited companies can offer additional tax planning opportunities and limited liability protection. Our accountants can help you determine the most suitable option for your business.
When should sole traders register for VAT?
VAT registration is usually required when your taxable turnover exceeds the current HMRC threshold. Some businesses choose to register voluntarily before reaching the threshold. We can advise whether VAT registration is appropriate for your business and manage the entire process on your behalf.
Should I be sole trader or limited company?
The answer depends on your circumstances, profitability and future plans. We regularly advise business owners on whether incorporation would provide tax, liability or commercial benefits and can manage the entire transition process if appropriate. We also provide a ‘disincorporation service’ to those who would prefer to revert to sole proprietorship.
Do small businesses need an accountant?
Yes. Many small businesses find that professional accounting support saves time, improves compliance and identifies tax-saving opportunities that outweigh the cost of the service.
When are company tax returns due?
Company accounts are generally due nine months after the financial year-end, while Corporation Tax returns must usually be filed within twelve months. Missing deadlines can result in penalties and unnecessary complications.
