Start Up Services

Realising your dream of starting a business is one of the most rewarding things you can do, but it can also be one of the toughest.

Without careful planning many small businesses fail in the early stages, which is why you would be well advised to include RMT in your initial planning.

The more forethought you can give to the task of running your own empire, the more likely you are to succeed.

We will strive to build up a close working relationship with you that will last for years. We’d like to see you through from the day you start your business to your ultimate retirement.

With RMT, you have the flexibility of an annual fixed fee for all recurring work we undertake for the business, including unlimited telephone access to our team for ad hoc advice. If it is agreed that additional work is required you’ll be told upfront what that will cost.

Next step
Starting a new business can be daunting and we want to help you get your venture off to the best possible start. Contact our business services team to arrange a FREE consultation.

Start-up services

SMEs, start-ups and sole traders all need financial services they can rely on – with predictable costs and a direct point of contact. We provide exactly that with services which are supported by our vast resources of experience and expert knowledge. Our clients can trust in us to meet all of their accountancy, tax, financial management and statutory obligations accurately, at a reasonable price and promptly. That leaves them free to focus on building their business.

Our team will get to know you and your business and, before you begin, will help you to consider important factors such as your key objectives, expectations, financial requirements and challenges. We work with start-ups to show them how to deal with the potential pitfalls associated with accounting, bookkeeping, VAT, PAYE and NI issues.

We also outline the most tax-efficient structures for fledgling enterprises and assist with limited company formation, partnerships or registering as self-employed.
Other important considerations such as your IT needs, budgetary limitations and communications capabilities are also areas we can assist you with.

An Accountants Guide To Starting Your New Company

Starting a new business venture is an exciting and challenging proposition, which also carries an element of risk. In 2026, there are more factors to consider than ever, including: your digital infrastructure; your target market and competitors; the potential for profit; tax-efficient profit extraction; the impact on your lifestyle; and your eventual exit strategy.

Business plan

A comprehensive business plan is essential, especially if you are seeking external funding or grants. This should include: your sources of funding; whether the business needs to be VAT registered (mandatory if taxable turnover exceeds £90,000); and the business structure that best meets your needs (sole trader, partnership, LLP, or limited company). We can help you navigate the registrations required for Making Tax Digital (MTD), ensuring your software is compliant from day one.

Business structure

You must decide which structure suits your risk profile. For example, a limited company offers protection through limited liability, but involves stricter filing requirements with Companies House. Conversely, being a sole trader is simpler but leaves you personally liable for business debts. We can also advise on whether to retain personal ownership of assets like freehold property upon incorporation.

The New “Tax Year Basis”

Important: The old rules that allowed you to use a non-aligned year end to defer tax have been abolished under Basis Period Reform. All unincorporated businesses are now taxed on profits arising in the actual tax year (6 April to 5 April). If you choose a different accounting year end (e.g., 31 December), you will need to apportion profits from two sets of accounts each year. To simplify your administration, we generally recommend aligning your year end with 31 March or 5 April.

HMRC registration

You must notify HMRC of your self-employed status by 5 October following the end of your first tax year of trading to avoid penalties.

National Insurance (Self-Employed)

Class 2 NICs: From April 2024, Class 2 NICs are no longer payable for most self-employed individuals. For 2025/26, if your profits are £6,845 or more, Class 2 contributions are treated as having been paid for benefit entitlement purposes (including State Pension credits). If your profits are below this level, you may be able to pay voluntary contributions depending on your circumstances.

Class 4 NICs (2025/26): Currently charged at 6% on profits between £12,570 and £50,270, and 2% thereafter.

Employment Allowance for new businesses

While the old “Regional NICs Holiday” is long gone, it has been replaced by the Employment Allowance. For the 2025/26 tax year, eligible employers can reduce their annual Class 1 secondary National Insurance liability by up to £10,500. This is a significant boost for small businesses looking to hire their first employees.

Note: Eligibility criteria apply. For example, if your company has only one director, they must not be the only employee liable for secondary Class 1 National Insurance, and other restrictions may apply depending on your circumstances.

Starting a business – 2026 Action Plan

Prepare a robust, digital-ready business plan	[ ]
Secure suitable funding or start-up capital	[ ]
Check and register your chosen trading name	[ ]
Choose the right structure (Sole Trader vs Limited)	[ ]
Register for Self-Assessment / Corporation Tax	[ ]
Register for VAT (if turnover > £90k)	[ ]
Set up MTD-compliant accounting software	[ ]
Align your accounting year end to 31 March / 5 April	[ ]
Apply for the £10,500 Employment Allowance (if eligible)	[ ]
Develop your digital branding and SEO strategy	[ ]
Plan for quarterly MTD reporting (where applicable)	[ ]

Making the most of deductible expenses

Our role is to work with you to minimise your taxes by ensuring you claim all legitimate business expenses. Under Making Tax Digital, keeping real-time digital records helps ensure you don’t miss out on relief.

If you work from home, you can claim tax relief on a proportion of household expenses (utilities, insurance, etc.) or use HMRC’s simplified flat-rate allowances. You can also claim for business travel and subsistence when working away from your main place of business. Accurate digital logs are vital as HMRC may request these during an audit.

Claiming Capital Allowances

“Capital allowances” provide tax relief for investment in business equipment. The current regime offers several high-value incentives:

• Annual Investment Allowance (AIA): Permanent at £1 million per year. It allows 100% tax relief on most plant and machinery (excluding cars) in the year of purchase. It is available to sole traders, partnerships, and limited companies.
• Full Expensing (Limited Companies Only): Allows companies to deduct 100% of the cost of new and qualifying plant and machinery from their profits in the year of purchase. There is no cap on the amount of investment that can qualify.
• Zero-Emission Vehicles: A 100% First Year Allowance is available for brand-new, unused electric cars (0g/km). A 100% First Year Allowance is also available for qualifying electric vehicle chargepoints. Reliefs are time-limited and may change with future Budgets.
• Writing Down Allowance (WDA): Typically 18% (main pool) or 6% (special rate pool for certain integral features).

Investing in Research and Development

The R&D tax relief system was overhauled in 2024 to create a merged scheme.

• Merged scheme: Most companies now receive a taxable expenditure credit of 20% (the net benefit depends on the company’s tax position, as the credit itself is taxable).
• R&D Intensive SMEs: Loss-making SMEs whose qualifying R&D spend is at least 30% of their total expenditure can claim a higher rate of relief under the enhanced support rules.

A family affair?

Employing family members can be tax-efficient if the salary is commercially justifiable for the work performed. You can also take family members into partnership to share profit allocations, though you must be mindful of “settlements legislation” to ensure the split is legally sound.

Vans vs Cars

Providing a van for employees remains a popular alternative to a company car. The benefit-in-kind charge for vans is a flat rate, which is often significantly lower than the CO2-based percentage charge for cars.

IR35 and Employment Status

Determining whether a worker is an employee or self-employed is a high-risk area. Under the Off-Payroll Working (IR35) rules, if you provide services to a medium or large-sized client, the client is responsible for determining your status. If you are deemed “inside IR35,” you must be taxed as an employee.

Profit Extraction for Owner-Directors

If you operate as a limited company, you must decide the best balance between salary and dividends.

• Dividends: The Dividend Allowance is £500. Beyond this, tax is paid at 8.75% (basic rate), 33.75% (higher), or 39.35% (additional).
• Salary: This is a deductible expense for the company but attracts both employee and employer National Insurance.

Avoiding Late Filing Penalties

HMRC has introduced a points-based penalty system for late filing to replace the old automatic £100 fine.

• You receive a point for every missed deadline.
• A £200 penalty is charged once you reach a submission-frequency threshold (for example, 2 points for annual filers and 4 points for quarterly filers).

Late payment interest is set by HMRC and changes over time. Please check the current rate if you are at risk of paying late.

Do not wait until it’s too late — please keep us informed of any factors which might affect your tax liability so we can plan ahead.

Follow-up – Contact us about…

• MTD-compliant software setup
• Navigating Basis Period Reform and changing your year end
• Maximising the £10,500 Employment Allowance
• Tax-efficient profit extraction strategies for 2026