First year of business
A practical checklist of tax, accounting, and admin tasks for your first 12 months in business.
Articles
The first-year calendar, assembled
A sole trader's first year runs to 5 April, with registration due by the following 5 October and the first return and payment the January after. A company's first year runs to its accounting reference date, with accounts due 21 months after incorporation, Corporation Tax nine months and a day after the period end, and the CT600 at twelve months.
Write your own version of this down in month one — your dates, in order, with amounts estimated. Every first-year crisis we see is one of these dates arriving unannounced.
The habits that decide the year
Reconcile the bank monthly from month one. Ring-fence tax from every receipt. Invoice promptly and chase on a schedule. Keep business and personal money separate. File everything the calendar demands, on time, even when the numbers are small.
None of this is sophisticated; all of it compounds either way. A year of small good habits arrives at year end as a filing exercise; a year of small bad ones arrives as archaeology with deadlines.
The first-year traps
The first Self Assessment bill arrives with payments on account stacked on top — eighteen months of tax in one January. The rolling VAT test creeps while you watch the accounting year. Cash in the account gets mistaken for profit, then spent, then owed. And 'I'll sort the bookkeeping later' becomes a year-end reconstruction bill that costs more than the software subscription ever would.
Each trap is disarmed the same way: know the number early. That is what monthly records are for.
When to bring in an accountant
Before the structure decision, ideally — it is the highest-leverage conversation of the year and takes twenty minutes. Failing that, before the first VAT decision, the first hire, or the first January. An accountant brought in at year end can file what happened; brought in early, they shape it.
That is the basis we work on: structure and registrations sequenced at the start, Compliance Vault™ running the records and deadlines from month one, and the first year's numbers known all year rather than discovered in January.
Frequently asked questions
How much should I set aside for tax in year one?
A common working rule is 25–30% of profits for a sole trader — remembering the first January includes payments on account — and for a company, the Corporation Tax accruing on profits plus the personal tax on what you draw. Ring-fence it monthly; precision can wait, the habit cannot.
Do I need an accountant in my first year?
You need the structure decision, the registrations, and the record-keeping habit right — however you get them. Most first-year returns are simple; most first-year mistakes are structural. One early conversation typically pays for itself several times over in avoided unwinding.
What software should I start with?
Any mainstream MTD-compatible cloud bookkeeping tool with bank feeds — started in month one and kept current. Which one matters far less than when you start using it. We set clients up on software matched to the business and take the bookkeeping into Compliance Vault™.
When does my first tax bill actually arrive?
Later than intuition says — a sole trade started in summer may owe nothing until the January eighteen months on, and a company pays nine months and a day after its first year end. The gap is the trap: the money feels spare precisely when it is being earned and owed.