Accountant FAQs – Tax & Bookkeeping Questions Answered | Smallbutcool Warwick

Question 1

What is corporation tax and when do I pay it?

Accepted Answer

Corporation tax is charged on your company's taxable profits. The main rate is 25% for profits over £250,000 and 19% for profits under £50,000, with marginal relief in between. Your company accounts must be filed with Companies House within 9 months of your year-end. The tax itself is due 9 months and 1 day after your accounting year-end — so if your year ends 31 March, payment is due 1 January.

Question 2

What's the difference between annual accounts and management accounts?

Accepted Answer

Annual (statutory) accounts are a legal requirement — filed once a year with Companies House and HMRC. They show your profit, loss, and balance sheet for the full year. Management accounts are produced more frequently (monthly or quarterly) and give you a live picture of how the business is performing so you can make better decisions. We produce both for our clients.

Question 3

What deadlines do I need to know about as a limited company?

Accepted Answer

There are four main ones: (1) Company accounts to Companies House — 9 months after year-end. (2) Corporation tax return (CT600) to HMRC — 12 months after year-end. (3) Corporation tax payment — 9 months and 1 day after year-end. (4) Confirmation Statement to Companies House — annually. Missing any of these triggers automatic penalties. We track all deadlines for our clients so nothing slips through.

Question 4

Can I claim R&D tax credits?

Accepted Answer

If your company has spent money on research and development — developing new products, processes, or software — you may be able to claim R&D tax relief. This can significantly reduce your corporation tax bill or even generate a cash repayment. The definition of R&D is broader than most people think. We assess eligibility for all our clients and handle the claim as part of your accounts.

Question 5

How should I pay myself from my limited company?

Accepted Answer

Most director-shareholders use a combination of salary and dividends. A small salary (typically around the National Insurance threshold — £9,100 for 2025/26) keeps you in the state pension system without a large NI bill. Additional income is then drawn as dividends, which are taxed at lower rates: 8.75% basic rate, 33.75% higher rate. We'll calculate the most tax-efficient split for your situation each year.

Question 6

What is a director's loan and how does it work?

Accepted Answer

A director's loan is money you take from the company that isn't salary, dividends, or expenses. If the loan isn't repaid within 9 months of your company's year-end, the company must pay a 33.75% tax charge (Section 455 tax) — which is refunded once the loan is repaid, but ties up cash in the meantime. Loans over £10,000 also create a benefit-in-kind. It's worth planning carefully before drawing one.

Question 7

How do pension contributions work through my company?

Accepted Answer

Employer pension contributions made by your company are a legitimate business expense, reducing your corporation tax bill and attracting no National Insurance. This makes pension contributions one of the most tax-efficient ways to extract money from a limited company. Annual contribution limits are up to £60,000 (or 100% of earnings). We factor this into every client's tax planning.

Question 8

What can my company claim as an expense?

Accepted Answer

Your company can deduct expenses that are wholly and exclusively for business purposes. These include: salaries, rent, software and subscriptions, equipment, professional fees (including accountancy), travel and mileage for business trips, marketing, insurance, and a proportion of home office costs. Anything with a dual personal/business use needs to be apportioned carefully.

Question 9

Can my company pay for me to work from home?

Accepted Answer

Yes. Your company can pay you a tax-free home working allowance of £6 per week (£312 per year) without needing receipts. Alternatively, if you use a room exclusively for work, your company can pay a proportion of your household costs as rent — but this needs to be structured correctly to avoid unexpected tax charges. We'll advise on the right approach for your setup.

Question 10

Can my company pay for my car?

Accepted Answer

Yes, but the tax treatment depends on the vehicle. Company cars create a benefit-in-kind (BIK) charge for you personally, based on the car's CO₂ emissions and list price. Electric vehicles currently attract very low BIK rates, making them highly tax-efficient. Alternatively, your company can reimburse you at HMRC's approved mileage rate (45p per mile up to 10,000 miles) for using your own car. We'll work out which is more advantageous.

Question 11

Does my limited company need to be VAT registered?

Accepted Answer

You must register for VAT once your taxable turnover exceeds £90,000 in any rolling 12-month period. Voluntary registration below this threshold can make sense if your customers are VAT-registered businesses (they reclaim the VAT) or if you make significant VATable purchases. Some companies benefit from the Flat Rate Scheme, which can be simpler and occasionally more profitable. We'll advise on the best approach.

Question 12

What is Making Tax Digital and will it affect my company?

Accepted Answer

MTD for VAT is already mandatory for all VAT-registered businesses — you must keep digital records and submit returns using MTD-compatible software. MTD for Corporation Tax is being consulted on but not yet mandated. We use Xero for all our clients, which is fully MTD-compliant, so if you work with us it's taken care of.

Question 13

Do I need to run payroll as a director?

Accepted Answer

If you pay yourself a salary — even a small one — you'll need to register as an employer and run PAYE. This means reporting to HMRC each month via Real Time Information (RTI) and paying any tax or National Insurance due. We run payroll for all our director clients as part of their service, so you don't need to think about it.

Question 14

What is the Employment Allowance and can my company claim it?

Accepted Answer

The Employment Allowance lets eligible businesses reduce their employer National Insurance bill by up to £5,000 per year. If you're the sole director and the only employee, you cannot claim it. But if your company has at least one other employee (or you pay yourself alongside another director), you may well qualify. It's one of those allowances that gets missed — we check eligibility for every client.

Question 15

What records does my company need to keep?

Accepted Answer

Limited companies must keep records for at least 6 years from the end of the accounting period. This includes: invoices (sales and purchases), bank statements, payroll records, VAT records, expenses receipts, and board minutes for significant decisions. Using cloud accounting software like Xero means most of this is captured automatically and stored securely.

Question 16

How much do you charge?

Accepted Answer

We work on fixed fees agreed upfront — no hourly billing, no surprises. The fee depends on the complexity of your company: size, number of transactions, whether you have payroll, VAT, and so on. Book a free consultation and we'll give you a clear quote based on your actual situation.

Question 17

How do I switch to Smallbutcool from my current accountant?

Accepted Answer

We handle the whole process. Once you appoint us, we contact your previous accountant, collect all the files and history we need, and notify HMRC of the change. You don't need to have any awkward conversations — we deal with it. The cleanest time to switch is just after your year-end accounts are done, but you can switch at any point.

Tax and accounts questions, answered in plain English.

Corporation tax and company accounts

Paying yourself

Expenses and what you can claim

VAT and Making Tax Digital

Payroll and employees

Working with us

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