Question 1

What is the VAT threshold in 2025?

Accepted Answer

The VAT threshold in 2025 is £90,000. If your taxable turnover exceeds this amount in any rolling 12-month period, you must register for VAT.

Question 2

When do I need to register for VAT?

Accepted Answer

You must register for VAT when your taxable turnover exceeds £90,000 in any 12-month period, or if you expect to exceed it in the next 30 days.

Question 3

What is the Flat Rate VAT Scheme?

Accepted Answer

The Flat Rate VAT Scheme lets you pay a fixed percentage of your turnover as VAT instead of calculating VAT on every sale and purchase. It simplifies VAT accounting for small businesses.

Question 4

When is Corporation Tax due?

Accepted Answer

Corporation Tax is due 9 months and 1 day after your company's accounting period ends. Your CT600 return must be filed within 12 months of the accounting period end.

Question 5

What is the Corporation Tax rate in 2025?

Accepted Answer

The main Corporation Tax rate is 25% for profits over £250,000. Small profits rate is 19% for profits under £50,000. Marginal relief applies between £50,000 and £250,000.

Question 6

How much salary should I pay myself as a director?

Accepted Answer

Most directors pay themselves a salary of £12,570 per year (the personal allowance) or £9,100 (the secondary NI threshold) and take the rest as dividends for optimal tax efficiency.

Question 7

How much dividend can I take from my company?

Accepted Answer

You can take dividends up to your company's available profits (retained earnings). There's no legal maximum, but you'll pay dividend tax above the £500 dividend allowance.

Question 8

What is a Director's Loan Account?

Accepted Answer

A Director's Loan Account (DLA) tracks money you personally owe to or are owed by your company. It's overdrawn when you owe the company money (borrowed more than you've put in).

Question 9

What is IR35?

Accepted Answer

IR35 is legislation that determines whether a contractor is genuinely self-employed or should be taxed as an employee. If IR35 applies, you pay similar taxes to an employee.

Question 10

What is a Confirmation Statement?

Accepted Answer

A Confirmation Statement (formerly Annual Return) confirms your company's details are correct with Companies House. It's due at least once every 12 months and costs £34 to file online.

Question 11

When are annual accounts due?

Accepted Answer

Annual accounts must be filed with Companies House within 9 months of your accounting period end. For HMRC, you have 12 months to file your Corporation Tax return including the accounts.

Question 12

Can I claim working from home expenses?

Accepted Answer

Yes. Your company can pay you £6/week (£312/year) tax-free for working from home. Alternatively, you can claim a proportion of actual home costs based on business use.

Question 13

What expenses can I claim through my company?

Accepted Answer

You can claim expenses that are 'wholly and exclusively' for business purposes. This includes travel, equipment, professional subscriptions, training, marketing, and business insurance.

Question 14

What is the mileage allowance?

Accepted Answer

The Approved Mileage Allowance Payment (AMAP) is 45p per mile for the first 10,000 business miles and 25p per mile thereafter. This covers fuel and running costs.

Question 15

What is Making Tax Digital (MTD)?

Accepted Answer

Making Tax Digital is HMRC's initiative requiring businesses to keep digital records and submit returns using compatible software. VAT is already under MTD; Income Tax follows in April 2026.

Question 16

What is R&D tax relief?

Accepted Answer

R&D tax relief allows companies to claim extra tax deductions or cash credits for qualifying research and development expenditure. SMEs can claim up to 21.5% of qualifying costs as a cash credit.

Question 17

Do I need an accountant for my limited company?

Accepted Answer

No, it's not a legal requirement. You can prepare and file your own accounts and tax returns. However, many directors use accountants or accounting software for compliance and tax optimization.

Question 18

How much does an accountant cost for a limited company?

Accepted Answer

UK accountants typically charge £100-300 per month for small limited companies. Annual accounts and tax returns cost £500-1,500 on a one-off basis. AI alternatives like AccountsOS cost £19/month.

Question 19

When is my Self Assessment tax return due?

Accepted Answer

The deadline for online Self Assessment is 31 January following the end of the tax year. For 2024/25 (ending 5 April 2025), the deadline is 31 January 2026.

Question 20

Do company directors need to file Self Assessment?

Accepted Answer

Usually yes. Most directors need to file Self Assessment if they receive dividends, salary above £100,000, or have other income. HMRC typically writes to new directors to register.

UK Accounting Questions Answered

Most Asked Questions

What is the VAT threshold in 2025?

When do I need to register for VAT?

What is the Flat Rate VAT Scheme?

When is Corporation Tax due?

What is the Corporation Tax rate in 2025?

How much salary should I pay myself as a director?

How much dividend can I take from my company?

What is a Director's Loan Account?

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