Small Business Finance · September 2026

Business Tax and HMRC: Key Points for Small Businesses

Business tax and HMRC: key points for UK small businesses

Last updated: 27 September 2026.

Running a UK small business means meeting HMRC on a few familiar taxes — Income Tax through Self Assessment, Corporation Tax, VAT and PAYE if you employ people — plus keeping records and hitting deadlines. This guide is a calm, high-level map of those pieces, not a DIY filing manual for complex cases.

Which taxes apply depends partly on structure. Sole traders and limited companies follow different paths — see sole trader vs limited company. Rates, thresholds and deadlines change.

Always check live GOV.UK and your HMRC online accounts before you plan numbers. This is general information, not personal advice. It is not tax advice and it is not a substitute for a qualified accountant.

Rates, thresholds and deadlines change. Always check live GOV.UK and your HMRC online accounts before you plan numbers. This is general information, not personalised tax advice.

Quick answer

Main taxes for many small businesses: Income Tax / NI via Self Assessment, Corporation Tax, VAT and PAYE.
Structure changes which taxes apply — see sole trader vs limited company.
Records matter; keep invoices, bank evidence and expense proof.
Deadline families differ: Self Assessment, Corporation Tax, VAT and PAYE each have their own clocks.

Key decision routes

Key concepts in plain English

Who collects what

HMRC collects most business taxes. Companies House handles company registration and accounts filings.

They are separate. Filing Companies House accounts does not replace a Company Tax Return to HMRC (or the other way round).

Tax year vs company accounting period

For Self Assessment, the personal tax year usually runs 6 April to 5 April (GOV.UK — re-check if you are reading this in a later year).
Limited companies use an accounting period (often the financial year) for Corporation Tax. Your dates sit in the company’s HMRC business tax account.

Making Tax Digital (MTD) — high-level pointer

MTD for VAT already applies to many VAT-registered businesses. MTD for Income Tax is rolling out for qualifying self-employed people. Before you name any start year or income threshold, check live GOV.UK for who is in scope.

Digital record habits matter either way — see accounting and bookkeeping software. Software helps; it does not guarantee a correct tax bill.

Expert note — HMRC vs Companies House

HMRC deals with tax. Companies House deals with company registration and statutory accounts.

A limited company usually has duties to both. One filing does not cancel the other.

Overview of the main taxes

Do not treat this page as a rate sheet. Income Tax, National Insurance, Corporation Tax, dividend tax and other rates change — check GOV.UK before you budget.

Income Tax and National Insurance (sole traders / self-employed)

Profits are usually assessed through Self Assessment. Income Tax and National Insurance may apply on profits.

For live bands and rates, use GOV.UK Self Assessment and National Insurance pages. An accountant can help you estimate what to set aside during the year.

Corporation Tax (limited companies)

The company pays Corporation Tax on its taxable profits. Directors may still need a personal Self Assessment if salary, dividends or other income apply.

How you take money out of a company has its own rules — see sole trader vs limited company. Corporation Tax rates change — always check the live rates on GOV.UK before you budget.

VAT

If you are VAT-registered, you charge VAT on taxable supplies (where the rules say so), reclaim VAT on eligible costs, and send returns to HMRC. Registration can be compulsory above the live threshold or voluntary below it.

As of the GOV.UK page checked for this guide (September 2026), you must register if taxable turnover for the last 12 months goes over £90,000, or if you expect it to go over £90,000 in the next 30 days — re-check the live VAT registration threshold on GOV.UK before you act. Many traders file quarterly; your exact return dates sit on your HMRC VAT account.

PAYE (if you pay people)

If you pay employees (including some family or short-term roles), you usually need to register as an employer and run PAYE — report pay and deduct tax and National Insurance as GOV.UK requires. This section is high-level only.

For employer duties, use GOV.UK “PAYE for employers”. No payroll-product picks here.

Who usually meets which tax

Tax	Often relevant for	Rough idea (source: GOV.UK)
Income Tax / NI (Self Assessment)	Sole traders; some directors personally	On profits / personal income
Corporation Tax	Limited companies	On company taxable profits
VAT	Either structure if registered	On taxable supplies
PAYE	Either structure if employing	On employee pay

Use the table to map which taxes might apply. No structure is simplest for everyone.

Record-keeping and deadlines

Records that make tax easier

Keep sales and purchase records, bank statements, invoices, receipts and expense evidence (including mileage where relevant). Cleaner records make Self Assessment, VAT and accountant reviews less stressful. Practical habits: business expenses and cashflow and invoicing and payments.

How long to keep records depends on the tax. Check GOV.UK for Self Assessment, VAT and PAYE retention rules rather than relying on a remembered “keep for X years” figure.

Self Assessment deadlines

Figures below match GOV.UK for the 2025 to 2026 tax year (6 April 2025 to 5 April 2026) as checked for this guide — re-check deadlines for the year you are filing.

Tell HMRC you need to complete a return by 5 October after the tax year if you have not sent one before (or if you registered before but did not need a return for the prior year) — GOV.UK.
Paper return: HMRC must receive it by 11:59pm on 31 October 2026 (for that tax year) or you may get a late filing penalty.
Online return: submit by 11:59pm on 31 January 2027.
Pay Self Assessment tax by 11:59pm on 31 January 2027 (same GOV.UK page).
Payments on account may also apply — GOV.UK notes a second payment deadline of 31 July for payments towards your bill. Confirm whether payments on account apply to you in your HMRC account or with an adviser.

Source: GOV.UK Self Assessment deadlines.

Corporation Tax deadlines

For companies with taxable profits of up to £1.5 million, GOV.UK says you must pay Corporation Tax 9 months and 1 day after the end of the accounting period. Higher-profit companies may pay in instalments — check GOV.UK if that might apply.

File the Company Tax Return typically within 12 months of the accounting period end (GOV.UK). Companies House accounts run on a separate clock — do not assume one filing covers both.

VAT and PAYE clocks

VAT: return and payment deadlines sit on your HMRC VAT account. Many quarterly traders pay about a month and seven days after the period ends — check your own dates rather than copying a neighbour’s calendar.
PAYE: report on or before payday; employer payment deadlines differ for electronic vs other methods — check GOV.UK for the live PAYE payment deadlines that apply to you.

Expert note — payments on account in one paragraph

After you have a Self Assessment bill, HMRC may ask for payments on account towards the next year’s tax — commonly due around 31 January and 31 July (source: GOV.UK). Missing them can surprise cashflow even when the annual return is filed on time. Check your HMRC account or ask an adviser whether they apply to you.

Simple timeline — a typical tax year for a small business

Example only. Dates must match live GOV.UK for the tax year you are in.

Illustrative — check your HMRC deadlines.

Sole-trader flavour (Self Assessment focus)

6 April — new tax year starts; keep records from day one.
During the year — invoice, track expenses, set money aside for tax.
After 5 April — gather records; prepare Self Assessment.
By GOV.UK paper / online deadlines — file the return (for 2025–26: paper by 31 October 2026; online by 31 January 2027, GOV.UK).
31 January — pay balancing payment and first payment on account if due.
31 July — second payment on account if due.
Ongoing — VAT quarters and PAYE if those apply to you.

Limited-company flavour add-ons

Accounting period ends → pay Corporation Tax typically at 9 months + 1 day (for profits up to £1.5 million) → file Company Tax Return within 12 months.
Companies House accounts sit on their own timetable.

Penalties for late filing or payment

Late filing or late payment can trigger penalties and interest. Amounts and systems differ by tax. Always check the latest GOV.UK guidance — this is not a complete penalty schedule.

Self Assessment: late filing and late payment penalties exist. Use GOV.UK Self Assessment penalty pages for current amounts — this guide does not quote pound figures for SA penalties.
Corporation Tax (Company Tax Return): GOV.UK’s late-filing table (checked for this guide) includes £200 one day late, another £200 at three months late, then further penalties linked to unpaid tax at six and twelve months. If a return is late three times in a row, the £200 penalties increase to £1,000 each. Source: GOV.UK company tax return late-filing penalties.
VAT: for accounting periods starting on or after 1 January 2023, late submission uses a penalty points system. When you reach the threshold for your filing frequency, you receive a £200 penalty, and further late submissions while at the threshold can attract another £200 each. Source: GOV.UK VAT late submission penalties. Late payment has its own rules.
Reasonable excuse / appeal routes exist in some cases — high-level only; follow GOV.UK appeal guidance if you receive a notice.

Calendars and software reminders beat last-minute panic. Penalties are avoidable with planning; they are not a normal cost of trading.

The catch

Common mistakes and pitfalls

Mixing personal and business money so records are messy
Ignoring Self Assessment registration after starting to trade
Quoting old VAT thresholds or tax bands from memory
Treating Corporation Tax and Income Tax as the same thing
Missing payments on account after the first big Self Assessment bill
Filing Companies House accounts but forgetting the Company Tax Return (or vice versa)
DIY complex claims without advice; assuming “software equals correct tax”
Waiting until January to open last year’s shoebox of receipts

Reminder to use professional advice

Tax depends on structure, profit level, employment status, VAT and reliefs. This page cannot assess your bill.

A qualified accountant (and a payroll specialist if you employ people) can set calendars, check MTD readiness and review filings. Use GOV.UK and your HMRC online accounts as the source of truth for your deadlines.

For context alongside advice: sole trader vs limited company, accounting and bookkeeping software, business expenses and cashflow, and business startup guides.

Summary / key takeaways

Main taxes for many small businesses: Income Tax / NI via Self Assessment, Corporation Tax, VAT and PAYE.
Structure changes which taxes apply — see sole trader vs limited company.
Records matter; keep invoices, bank evidence and expense proof.
Deadline families differ: Self Assessment, Corporation Tax, VAT and PAYE each have their own clocks.
Late filing and payment penalties exist — check the latest amounts on GOV.UK.
Use the illustrative year timeline as a planning aid, not a personal calendar.
Seek professional advice before you decide how to structure filings or extractions.
More guides: Small Business Finance, business startup guides, accounting and bookkeeping software, business expenses and cashflow.

Bookmark GOV.UK Self Assessment and Corporation Tax deadline pages and re-check figures before every tax year.

Business tax and HMRC: FAQs

Which main taxes do UK small businesses often meet?

Running a UK small business means meeting HMRC on a few familiar taxes — Income Tax through Self Assessment, Corporation Tax, VAT and PAYE if you employ people — plus keeping records and hitting deadlines. Which taxes apply depends partly on structure: sole traders and limited companies follow different paths.

What is the difference between HMRC and Companies House?

See Key concepts in plain English above.

When might you need to register for VAT?

See Overview of the main taxes above.

What Self Assessment deadlines should you verify?

Tell HMRC you need to complete a return by 5 October after the tax year if you have not sent one before. For the 2025 to 2026 tax year as checked for this guide: paper return by 11:59pm on 31 October 2026; online return and payment by 11:59pm on 31 January 2027. Payments on account may also apply — re-check deadlines for the year you are filing on GOV.UK.

What happens if filings or payments are late?

See Penalties for late filing or payment above.

Written by Steven — Editor, The Finance Lowdown

Fact checked by Angela — Editorial Reviewer

Last updated: 27 September 2026