Designed for non-VAT registered businesses, we'll do your bank reconciling so you can relax knowing it's done right, and on time.

Bank reconciliation - non-VAT registered companies

A 12-month plan designed for new business owners who may want some extra guidance around business structure, accounting software setup and training, and more.

We will provide you with guidance and support on what you'll need to do to establish and commence running your new business

We can provide advice on the best business structure for your needs and take care of establishment and registrations

Set up your Xero file so it's optimised for you and give you initial training so you start off in the right way

Preparation of a budget tailored to your business and input into Xero so you can track how you're going

Starter Pack

We will help get your business officially incorporated

Company formation

Designed for sole trader businesses, we'll do your bank reconciling so you can relax knowing it's done right, and on time. Take one less task off your plate.

Bank reconciliation - sole trader businesses

A 12 month plan designed for established businesses. Additional support in the form of management accounts and time with your accountant

Completing quarterly management accounts tailored to your business requirements and aligned to your VAT quarters

Quarterly meetings with your accountant to chat business planning, strategy, or questions about your management accounts

Success pack

The initial setup of your Xero accounting software tailored to your business's needs, plus a one hour training session where you'll learn the best practices for bookkeeping and financial tracking.

Xero setup & training

We prepare your quarterly VAT returns ready for you to review and pay.

Prepare VAT

Learn how depreciation works, what assets can be depreciated, and how it affects your tax position.

FINANCIAL LITERACY  •  7 JULY 2025  •  6 MIN READ

Learn how depreciation works, what assets can be depreciated, and how it affects your tax position. Clear advice for business owners in the UK.

What is Depreciation? A Guide for UK Businesses

As a UK business owner you’ll often buy assets to help run your business, for example, a laptop, car, office furniture, and machinery. These items are often used in the business over a number of years, but they don’t hold their value forever. Over time, these assets lose value through wear and tear, obsolescence, or simply because they’re no longer fit for purpose. This reduction in value is known as depreciation, and understanding how it works is important when it comes to managing your finances and filing your accounts.

In simple terms, depreciation is an accounting method that allows businesses to spread the cost of an asset over a period of time (also known as ‘its useful life’).

Instead of reflecting the full cost of the asset as an expense in the year it was purchased, you spread the cost over its estimated lifespan.

For example, if you bought a piece of machinery for £50,000 and it’s expected to last 10 years, you would reflect £5,000 of costs each year for 10 years, rather than reflecting the full $50,000 in 1 year.

Depreciation helps acknowledge that your assets contribute to your business’s income over its entire lifespan rather than only in the year it was purchased.

Depreciation might sound like an accounting technicality, but it plays an important role in the financial management of a company.

In the UK, businesses use depreciation to reflect the reduction in value of their assets over time. This isn't just for internal tracking; it's also a requirement under UK accounting standards to show depreciation in company accounts. This ensures the financial statements give a true and fair view of the business's financial position.

Here are a few key reasons why depreciation matters.

Depreciation spreads the cost of an asset over its useful life, rather than recording it all as an expense in the year of purchase. This gives a clearer picture of profitability, ensuring your profit and loss account shows a more realistic cost of using the asset each year.

It also helps with consistency in reporting, which is important when comparing financial performance across different periods, especially useful for management decisions, investor confidence, or when applying for finance.

Over time, assets lose value. Depreciation helps track this by showing the current book value of each asset i.e. the original cost less accumulated depreciation.

Accumulated depreciation over a few years: £15,000

This is particularly useful for internal planning, asset management, and in some cases insurance valuations.

While depreciation appears in your company accounts, it's not a tax-deductible expense for UK corporation tax purposes. Instead, HMRC uses a separate system called capital allowances.

This means you "add back" depreciation when calculating your taxable profits, and then claim capital allowances, which offer tax relief on certain qualifyin purchases of equipment, vehicles, and other assets. These don't always match the depreciation rate used in your accounts, but they still offer valuable tax savings over time.

So while you won't get tax relief based on your depreciation figures, you do still benefit from tax deductions on capital expenditure.

Generally, you can depreciate assets that:

You own (or have leased under a finance lease arrangement),

Are expected to decline in value over time, and,

You can’t depreciate things like stock, land, or everyday expenses like internet or electricity. (Land is generally not a depreciating asset as it typically doesn’t decline in value).

There are a few different ways depreciation can be calculated, but you don’t need to do all the maths yourself. That’s what your accountant is for.

Here are two common methods used by UK businesses:

This method lets you claim more depreciation in the early years of owning an asset, and less as it gets older. It’s similar to how a car loses value more quickly in the first few years.

Depreciation is calculated as a percentage of the asset's net book value each year, not the original cost.

You buy a car for £20,000 and apply a 20% depreciation rate on a reducing balance basis.

Year 1: 20% of £20,000 = £4,000. Net book value = £16,000.

Year 2: 20% of £16,000 = £3,200. Net book value = £12,800

Year 3:20% of £12,800 = £2,560. Net book value = £10,240

Each year, the depreciation is based on the remaining value, not the original purcahse price.

This method spreads the depreciation evenly over the asset's useful life. It's a simpler and more predictable approach.

You purchase machinery for £50,000 with a useful life of 10 years. Using this method, you'd depreciate it by £5,000 each year.

You claim the same amount of depreciation each year until the asset's value is fully written off.

Depreciation is more than just an accounting term. It’s a valuable tool that can impact your business's profitability.

Understanding how it works and why it’s important is useful for effectively managing your business assets, operational efficiency, and finances.

For tailored assistance on how depreciation applies to your business assets and to ensure you’re maximising eligible deductions, it's always recommended to consult your accountant.

Beany are an online accounting firm in the UK that delivers big firm expertise without the big cost. We handle everything accounting-related (such as annual compliance, bookkeeping, financial insights and strategy), and help business owners make smarter decisions for their business and lifestyle through our responsive, friendly expertise.

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What is depreciation (and why does it matter)?

Financial literacy

Learn how HMRC defines the role of company director and what it means for tax and National Insurance.

FINANCIAL LITERACY  •  9 JUNE 2025  •  5 MIN READ

Wondering if you're classed as self‑employed as a company director? Learn how HMRC defines your role and what it means for tax and National Insurance.

Are Company Directors Self-Employed in the UK?

Many company directors, especially of small and owner-managed businesses, often wonder if they are deemed to be self-employed for tax purposes. 

The term ‘self-employed’ is often used loosely in everyday language, but HMRC gives specific guidance around who is deemed to be self-employed. Spoiler, being a company director does not equate to being self-employed. 

Understanding the difference is important as it affects how you pay tax, your responsibilities and your reporting obligations. 

We’re going to clear up the confusion, explain how directors are classified and what that means in practice. 

The short answer is no, being a company director does not mean you are self-employed. 

By HMRC’s definition, a person is self-employed if they run their business for themselves, and take responsibility for its success or failure. This is applicable to sole traders, where the person and business are legally one and the same. 

Company directors run limited companies on behalf of shareholders, and are classed as office holders for tax and National Insurance Contribution purposes. 

Now you might be wondering, what if I’m the sole director and shareholder of my limited company, surely that means I fall under the definition of self-employed? The answer is no, because in the eyes of the law, the limited company is an entirely separate legal entity, distinct from directors and shareholders.

Directors are often employees of the limited company, in addition to being an office holder. You are therefore working for and on behalf of the company and its shareholders, and in exchange you might receive a salary which is taxed through PAYE (pay as you earn). 

When might a company director also be self-employed?

A company director may also be self-employed, but it would be in a separate capacity to their work associated with the limited company.

For example, if they were a director of a tech company but also ran a sole trader business (e.g. freelance wedding photography), the sole trader income would be classed as self-employment as it's entirely separate from their work with the limited company.

If self-employed work is being done for the company, and the director was to invoice for work they carry out as company director (rather than take a director's salary), this would likely be contested by HMRC and disallowed as self-employment income.

A company director usually receives at least some of their income by way of a salary (and perhaps bonuses). These are paid via the company payroll and are subject to PAYE tax and national insurance.

If a director is also a shareholder of the company, they can also get paid via dividends. Often directors will take a small salary and the balance as dividends, as this is often the most tax-efficient.

Directors may also receive benefits in kind, such as a company car or private medical insurance.

Do company directors need to complete a self assessment tax return?

Company directors will need to complete a self-assessment tax return if any of the following apply:

They have other untaxed income in addition to their director’s salary

Their director’s salary is over £150,000 a year

Key tax responsibilities for company directors

If the director is receiving a salary from the company, the company must deduct income tax and National Insurance Contributions via PAYE and report this to HMRC. 

The company must also report to HMRC (and pay the associated tax and national insurance contributions), in relation to any benefits in kind that the director receives.

Directors are individually responsible for completing and filing their own self assessment tax return (if required).

The self assessment filing deadline is 31 January following the end of the tax year, meaning for the 24/25 tax year the deadline is 31 January 2026.

If the director has additional tax to pay (for example tax on the dividend income) this will need to be paid by 31 January 2026, and payments on account may also be needed.

Tips for managing your taxes as a company director

Record keeping is one of the most important things company directors can do to ensure their affairs are in order. Make sure you’re keeping a record of all your income, expenses, dividends (if you receive them) and any other business-related transactions.

This includes keeping invoices, receipts and bank statements. This will help you, or your accountant pull together your self assessment tax return and means you’ll have all the supporting documents available should HMRC need to see them.

If you're a company director and a shareholder, you should plan your salary and dividends carefully to make the most of tax allowances and minimise overall tax and national insurance contributions. This is where it’s useful to engage an accountant as they keep up to date with all the rules and regulations and should be able to help you determine the most beneficial split between salary and dividends. 

If you are also receiving dividends then you should put aside money for tax and plan for these payments, as the tax on dividend income is not deducted at the source.

Lastly, it’s advisable to get accounting advice early, rather than leaving it too late, so the accountant can provide the most value and ensure you're being paid in a way that is tax-efficient and in line with your goals and those of the company.

In summary, company directors are not deemed to be self-employed on account of their position as director. They are office holders and may also be employees. 

However, a company director may also be self-employed if they operate a sole trade business outside of their capacity as company director.

We understand accounting and tax can be complicated. Beany's certified accountants and friendly team can prepare and file your business tax return plus returns for shareholders/directors. We carefully interpret and apply accounting and tax legislation to enable you to pay the least amount of tax legally possible.​

Our expertise comes without the jargon and is designed to help you save both time and money. To find out more about how we can help, book a call to discuss your requirements.

Are company directors self-employed? Understanding your tax and self assessment responsibilities

Do you know all there is to know on filing UK tax returns? This list provides a quick rundown of the important info such as deadlines, recordkeeping and more.

Understand UK tax return requirements for sole traders and companies. Read our quick fire list of all the important things you should know about filing income tax in the UK.

UK Tax Returns Guide | Self Assessment & Company Tax Explained

The facts to know when filing a tax return in the UK

Do you know all there is to know about filing UK tax returns? There are always misconceptions floating around, so we’ve put together a handy fact sheet to cut through the noise. Whether you're filing for the first time or a seasoned professional, you need to file your tax return correctly, on time, and (ideally)  with the best outcome possible. 

This list provides a quick rundown on the key definitions, deadlines, and aspects you should know, as well as pitfalls to be aware of. As they say, knowledge is power - so read on to keep yourself informed.

Taxable income and deductions must be reported in pound sterlings

Late filing of tax returns will result in penalties and late payment of your tax liability will result in interest charges.​

Income tax returns are used to calculate the amount of income tax owed for the tax year.  Even if you're filing frequent VAT returns, you still must file an income tax return, as it is a separate tax.​

Tax returns can be amended up to 12 months from the filing deadline if you find errors or omissions after they've been filed.​

The rundown on self assessment tax returns

The tax year in the UK runs from the 6th of April to the following 5th of April. 

You must file a tax return if you derived over £1,000 of any form of sole trader business income, self-employment income, or contracting income. You also need to file a tax return if you have earned income that has not already been taxed in the UK - this includes rental income (including AirBnB), income from savings, investments and dividends, tips and commission, and overseas income. 

You also need to file a self assessment tax return if you were a partner in a business partnership or you earned £150,000 or more.

If you’re an individual and your only source of income is a UK-earned salary or wage, and you earn less than £150,000 a year, you don’t need to file a tax return.  HMRC will contact you directly if they owe you money (or if you owe them!)

Taxable income includes salary and wages, interest, dividends, business income, and rental income.  

You can claim a tax credit for tax deducted before it was paid to you - for example, PAYE deductions made by your employer, Withholding Tax (WHT), or if you’re a CIS worker.

The deadline for filing your self assessment income tax return on paper is the 31st of October after the end of the tax year. However, if you choose to file it online the deadline is the 31st of January after the end of the tax year.

Your tax liability must also be paid by the 31st of January after the end of the tax year.

Payments on account for Self Assessment are typically due in two instalments: 31 January during the tax year and 31 July following the end of the tax year. These payments are based on the tax due for the previous year. If your total tax bill for the previous year exceeds £1,000, you will usually need to make these payments. If your actual tax bill for the year is lower than the payments you’ve made, HMRC will refund the excess. If your tax bill is higher, the remaining balance must be paid by 31 January following the end of the tax year.

Business expenses can be claimed in a tax return against business income as long as they are incurred in the course of your business or trade. You’re not eligible to claim expenses that are for personal use, and if there is an expense that has a personal and business element you will need to split out the business element and claim a deduction for this only.

If your expenses are minimal or you did not keep records of your expenses, including receipts and invoices, you could claim the £1000 trading allowance instead.

If your company is trading, you must file a corporate tax return, regardless of whether or not your company made a profit. 

Your tax liability needs to be paid 9 months and 1 day after the end of your accounting period (except if the company is deemed to be a large or very large company in which case quarterly installment payments are needed). ​

Your tax return is due 12 months after the end of your accounting period. 

A company tax return is used to calculate the amount of corporation tax owed for the tax year. 

If your company generates a loss during the period the tax return calculates the taxable loss that can be carried forward and offset against future taxable profits, therefore reducing your tax liability in future periods. ​Taxable losses can also be carried back and used against profits generated in previous years to claim a corporation tax repayment.

Taxable income includes trading profit, interest income, investment income and income from gains made on the disposal of capital assets. 

Tax credits are sometimes available, for example, if you carry out research & development and hit certain criteria relating to innovation and making advancements in science or technology then tax credits can be claimed. 

Business expenses can be claimed in a tax return against business income as long as they are incurred wholly and exclusively for the purposes of the trade. 

HM Revenue & Customs is responsible for collecting taxes from both individuals and businesses, as well as administering tax laws passed down by the UK government. They also manage benefits, tax credits, and other financial support for UK citizens (such as student loans and child support). Understanding how HMRC works is a vital part of submitting a tax return correctly, so here are some key points to keep in mind.

HMRC can open enquiries into tax returns to ensure compliance with tax laws.

HMRC can impose fines and penalties for non-compliance with tax laws.

HMRC provides tax tables and calculators to help calculate the amount of tax owed.

Employers are required to deduct Pay As You Earn (PAYE) tax from employees' salaries and wages and remit it to HMRC.

HMRC can negotiate payment plans for taxpayers unable to pay their tax debt in full.

HMRC can issue tax assessments if it finds errors or omissions in tax returns.

Tax refunds can be claimed by filing a tax return or by contacting HMRC.

HMRC refunds overpaid tax, including PAYE and VAT. 

HMRC can offset tax refunds against outstanding tax debts.

Sole traders are required to keep their financial records for 5 years from the 31 January filing deadline following the end of the tax year they relate to. For example, records for the 2022/23 tax year must be kept until 31 January 2029. 

Limited companies must retain their financial records for 6 years from the end of the financial year to which they relate.

Employers must keep records of employees' salaries and wages, PAYE tax deducted, and auto-enrolment contributions for 3 years from the end of the tax year to which they relate.

Professional help from an accountant can minimise the risk of errors and penalties and help ensure compliance with tax laws.

How can Beany help with UK business tax returns?

We understand accounting and tax can be complicated and we're here to help. Beany's certified accountants and friendly team can prepare and file your business tax return plus returns for shareholders/directors. We carefully interpret and apply accounting and tax legislation to enable you to pay the least amount of tax legally possible.

The ultimate fact sheet on UK tax returns and HMRC

The cost of getting an accountant for businesses depends on several factors: from business size, timing, expertise to location.

EXPENSES  •  5 JUNE 2025  •  5 MIN READ

What affects the cost of an accountant for your UK business? Explore the key factors that influence pricing, from business size to services needed.

How Much Does an Accountant Cost for a UK Business?

Dealing with accounting can be tedious and stressful, but it’s a necessary chore for every business owner. It can be challenging to balance your business, maintain good accounting records, analyse financial statements, and comply with tax deadlines. Hence, hiring an accountant is a wise decision. Although it’s considered an overhead expense, paying an accountant ensures that your finances are in check, that you’re compliant with the law, and often saves you far more in tax than you spend on the accountant’s fees.​

The cost of an accountant in the UK can start from around £500 per year for the smallest and most straightforward business, but will be impacted by business structure and size, and the type of services and support you are looking for. An accountant may charge a fixed monthly fee or an hourly charge (varying from £50 to £400+). However, other factors, such as the scope of the work and the accountant's experience and expertise must be considered as well.​

What’s the difference between a bookkeeper and an accountant?

Bookkeeping and accounting are integral parts of your business’s finances. Many business owners think they are one and the same, however, there are a few key differences.

A bookkeeper is typically involved in recording business transactions (e.g. payroll, invoicing, payment of bills). Their job is more repetitive. It does not require a lot of high-level knowledge or experience to be a bookkeeper. Normally, university graduates or business administrators with some training can take on the job. Their main focus is to make sure the accounting records are accurate and up to date. 

An accountant provides insights based on the key financial data. Depending on their experience and knowledge, they can provide strategic advice, tax planning for the future and more. They review the business’s financial statements, budget for the coming year, prepare and file financial statements with Companies House and tax returns with HMRC, and analyse business performance. ​

Often, accounting providers (like us) will offer bookkeeping services too.

The cost of an accountant commonly depends on several factors such as business size, expertise, business timing, experience level, level of accounting support you need, the tidiness of record keeping, and location.

There's a general rule that applies when it comes to the cost of a business accountant: the bigger and more complex your business is, the more the accountant needs to review. Compared to a small business that is operating under a sole trader structure, larger companies may likely have more transactions. For example, a sole trader consultant who has minimal expenses and invoices a few different clients each month will have less transactions than an e-commerce business that sells thousands of products online every day. This means accountants need to spend more time reviewing the financial data and turning this data into financial statements and tax returns. ​

At Beany, our fees are based on your business's gross annual income or turnover. The Form Package has a monthly fee of £95 (VAT exclusive) if your annual gross earning is up to £150k. If your income exceeds this threshold, you'd move into our Flow or Flex package. ​

Some accountants have vast experience in specific industries e.g. construction, farming, real estate. The cost of hiring an accountant who specialises in the construction industry for example, might be higher due to its complexity. Not only do they have to know and comply with specific laws and regulations, but also they need to have an in-depth understanding of job costing, revenue recognition using the percentage of completion method, and CIS.

If you’re looking for an accountant closer to the date when your tax is due, the cost can also increase. Consult an accountant in advance of the filing date to avoid the stress of leaving it to the last minute and the extra cost of expediting the process. ​

Another option is to hire an accountant who offers fixed monthly fees. For example, Beany breaks your accountant fees into 12 months and you’re guaranteed to pay a fixed monthly fee. The packages include financial statements, company tax return, personal tax returns for up to 2 directors/shareholders, confirmation statement, as well as unlimited support and advice for day to day queries.

Your accounts are in good hands with Beany, we’ll send you an alert and your dedicated accountant will do everything you need after completing the hassle-free questionnaire (you save time sending heaps of paperwork to your accountant!).

Experience plays a role in how much an accountant costs. A certified accountant with more experience will be more expensive. Although you can choose to use a less expensive accountant, be sure to do your due diligence to see if they meet your expectations. In the UK, the commonly recognised certification for accountants is ICAEW (ACA) or ACCA. Be sure to find a good Chartered Accountant. They may appear to be expensive to start with, but in reality, the services they provide to you may save you more on tax or increase business sales.

If you need more support from your accountant, that will obviously push the fee up. If you have no idea about accounting, you are likely in need of more help from your accountant to teach you, from the basic VAT ruling, bank reconciliation and so on. However, if you have been in business for many years, you may already know all the tax deadlines, Xero functions, which requires less help from your accountant.​

Businesses operating under different business structures have an impact on the level of accounting support you need. Sole traders won’t need the same level of support as a business operating under partnership or company structures.  The bare minimum support you need from your accountant is to meet compliance with HMRC. However, if you’re running a small business as a sole trader, your accounting and tax requirements will be more straightforward than partnerships or companies. You can read more on business structure in this article.

The better you keep your records tidy and up to date, the cheaper your accountancy fee will be. Some business owners have the idea to dump all information to the accountant at year end, and expect things to be tidied up nice and quick. It can be done, but it will also be more costly. As more time and effort is spent digging into the records. ​

Also, it is important to remember it is your business to start with. We generally find business owners with good record keeping and willingness to learn accounting knowledge will have good business results and keep accounting fees low. With the help of technology, it isn’t that hard. When you make a large purchase, simply take out your phone and take a photo of the invoice, and upload that to Xero straight away. This can reduce the work for your accountant at year end, asking you about an invoice from several months back, which you will find hard to recall what you bought and where the invoice is. ​

In general, accountants in big cities such as London will charge higher fees than accountants located in smaller towns or more rural areas. However, the key isn’t to find the cheapest one, but the best one at the best price.

Do I need an accountant for my small business?

It is common for small business owners to believe that they don't need an accountant if they’re using accounting software. But the truth is: it is better to have both. Technology certainly helps, but hiring an accountant will ensure you're properly guided and compliant with laws and regulations. Having them on board can not only help you improve your financial systems, but also eliminate the headache when it comes to understanding the nuances behind the key numbers and enabling you to grow your business further. 

Read more: How to find the right accountant for your small business

Beany are accountants for ambitious businesses, delivering big firm expertise without the big cost. We handle everything accounting-related (such as annual compliance, bookkeeping, financial insights and strategy), and help business owners make smarter decisions for their business and lifestyle through our responsive, friendly expertise. Book a call or get in touch if you want to discuss your accounting requirements and how we can help.

The cost of an accountant for your UK business

Expenses

Need to file a P11D? Learn what employee benefits need to be reported, who needs to submit the form, and how P11Ds work with PAYE and Class 1A NICs.

P11D & Employee Benefits Explained | UK Guide for Employers

We’re not going to get too technical here, just the basics and some figures to show the impact.​

In reality, companies could have many employees receiving all types of benefits, which result in multiple (and complex) calculations. We won’t get into that, but we're going to talk about the basics of employee benefits every business owner should know. ​

A P11D is a form used by employers in the UK to report any non-cash benefits provided to employees. The most common non-cash benefits are:

These benefits are reported through the P11D and may be subject to additional tax and National Insurance contributions. 

Here’s a simple example showing the difference between two employees receiving the same remuneration value, but in different forms.​

Gross salary: £65,000, plus use of a company vehicle

Employer claims the expense of £65,000 salary and costs associated with owning the vehicle (including fuel, insurance, loan interest, maintenance, repairs, etc.)

Fair? We think not, and more importantly, HMRC thinks not.​

Employee benefits taxation aims to square things up.

Employees are taxed on their salary and any benefits received, and the tax is based on their total income. The P11D ensures that these benefits are reported to HMRC, and employees will pay tax on the value of the benefit.

Jane’s salary is subject to PAYE tax as normal.

John’s salary, plus the benefit of the company car, will be taxed. The value of the benefit (such as the car) will be added to his total taxable income.

Employers must report these benefits to HMRC on the P11D form. Employers must also pay Class 1A National Insurance contributions on the value of the benefits provided to employees. The P11D form must be submitted by July 6th after the end of the tax year (April 5th), and employers must pay any associated National Insurance by July 22nd.

Reimbursements are where the employee pays a bill on behalf of the company. The most common are accommodation and fuel.​

The employee provides a receipt to the employer and receives the reimbursement. The company records this as a tax-deductible expense.​

Reimbursements aren’t included in a P11D as they are simply repaying the employee, not providing any benefit.​

Certain small gifts and vouchers provided to employees can be exempt from P11D reporting. Specifically, if the cost of a gift or voucher is £50 or less per gift, it is generally exempt from P11D reporting and does not need to be declared to HMRC. Employees can receive multiple gifts throughout the year, and as long as each individual benefit does not exceed £50 they will qualify for the tax exemption.

There are a number of benefits that can be provided to employees that have no tax implications and don’t need to be included on a P11D. These include:

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