If you’re self-employed or running a small business, one of the most important decisions you’ll make is choosing your accounting method. Should you use cash basis accounting or accrual (traditional) accounting? Understanding the difference is essential — because it affects: How your profit is calculated How much tax you pay What you report to HM Revenue & Customs How clearly you can see your business performance In this guide, we explain cash basis vs accrual accounting with examples. What Is
The best way to show how this works is with an example, HMRC require 50% on account in each January and July based on the tax paid for the year before. If 5 April 2026 is your first year then you will not have made payments in January and July 2025 and so payment on 31 January 2027 in this example based on taxable profits of £25,000 will be: Tax and NIC Payments due Income Tax 2025/26 £2,286.00 Class 4
Self Assessment: What to Watch This Year The Self Assessment tax return deadline (31 January) continues to be one of the biggest pressure points for self-employed individuals. HMRC has again reminded taxpayers that late filing or late payment can result in: Automatic £100 late filing penalties Daily fines after 3 months Interest charged on unpaid tax Managing Tax Bills as a Self-Employed Individual With the cost of living still high, managing cash flow is a growing concern for many sole
5 Reasons to use a Chartered Accountant Before choosing your accountant Unless a member of the ICAEW ( Institute of Chartered Accountants) or qualified with another professional body, anyone can call themselves an accountant, even if they have no professional training or qualifications to back it up. We recommend you check that any accountant you approach has some formal training and /or qualification and carries professional indemnity insurance just in case its needed. Experience To qualify as chartered accountant, I
Here are the important points for self employment and some of the key issues to understand. It may seem a lot to take in but don’t worry, we can guide you through this Are you going to trade under your own name, e.g. J Smith or have a trading name such as J Smith trading a JS Therapy? Register as self employment with HMRC, this will ensure that you are on the system as you will need to complete tax
