Tips & Advice

New Company? 10 Tax Steps Before Your First Year-End (UK)

Published: 13 October 2025

Reading time: ~6 minutes

Icons of scales, pound coins, shield, tax letter, calendar, bank and checklist representing limited company first year tasks and company formation filing deadlines in the UK.

Your First-Year Essentials At A Glance

Launching a limited company is exciting, but the first twelve months set the tone for compliance, cash flow and calm. This guide gives owner-managed companies a clear roadmap through the limited company first year, from day-one setup to filings after year-end.

Quick Timeline

Day 0–30:

  • Decide your Accounting Reference Date (ARD).
  • Open a business bank account.
  • Choose accounting software.
  • Set up bookkeeping process and maybe receipt capture.
  • Create a simple finance calendar (monthly tasks + statutory deadlines).
  • If you work in construction, check CIS status.
  • Ensure insurance policies and new contracts are in the company’s legal name.

Month 1–2:

  • Consider PAYE/Pension position if paying salary.
  • Assess VAT position.
  • Set up Government Gateway and note UTR numbers when received.
  • Add/authorise your accountant (64-8) for CT, PAYE, VAT as needed.
  • Register with ICO for data protection (if applicable).

Ongoing monthly:

  • Run payroll & RTI and pay PAYE & pension.
  • Reconcile the bank, keep digital records.
  • Keep directors’ minutes for key decisions.
  • Keep accurate records for your Directors' Loan Accounts.

First 12 months:

  • Maintain statutory registers, minutes, and dividend paperwork.
  • Review pricing, VAT schemes, and salary/dividend mix before year-end.
  • Pre-year-end tax planning meeting (accruals, capex, bonuses/dividends timing).

Post year-end:

  • File accounts to Companies House and CT600 to HMRC.
  • Pay Corporation Tax by the deadline.

Every 12 months:

  • File your Confirmation Statement.
  • Check PSC/registers and SIC codes still fit.

1) Set Your ARD And The Basics

On incorporation, Companies House assigns an Accounting Reference Date, which drives your first accounts window and filing deadlines. You can change it if there’s a sound reason.

The official GOV.UK overview under accounts and tax returns for private limited companies explains the 21-month first accounts rule and later 9-month deadlines, plus CT filing and payment timing on one page, so bookmark the relevant guidance on preparing and filing annual accounts.

Make sure your registered office and service address can receive post. Put the ARD and all deadlines in a shared calendar on day one.

2) Open A Dedicated Business Bank Account

Use a dedicated business bank account only. Don’t pay personal costs from it. If you put personal money into the company, record it as a Director’s Loan to the business (and keep a simple log of dates/amounts).

If you accidentally pay a business cost personally or have paid for business expenses before the business bank was set up (pre-incorporation costs), either reimburse yourself from the company or keep a record so we can post it to the Director’s Loan Account (DLA) to be reimbursed at a later date.

If you’re using bookkeeping software, connect bank feeds and capture all start-up (and early trading) costs so your first-year accounts reflect the true cost of setup.

Good organisation now equals faster year-end and cleaner limited-liability separation.

3) Choose Bookkeeping Software And Go MTD-Ready (Optional)

Pick a cloud system and keep it tidy from month one.

Turn on bank feeds, set a sensible chart of accounts and use a receipt capture tool. Consider Xero and HubDoc for effortless capture and approvals.

Keep digital records so you’re ready for Making Tax Digital expansions and reconcile weekly to avoid pile-ups.

If you want help, our team can set up Xero and a simple month-end routine through our tax and accounting services for companies.

4) Decide How You’ll Pay Yourself

Most small companies use a blend of modest salary via payroll (PAYE) plus dividends from post-tax profits.

If paying a salary, you need PAYE and Real Time Information submissions on or before payday; dividends need available profits, minutes and vouchers, and correct postings to the Director’s Loan Account (DLA).

Our plain-English guide on how to pay yourself from a limited company explains the trade-offs between salaries, dividends and DLAs.

5) Register For PAYE & Pension If Paying Salaries Or Offering Benefits

If you pay salaries or offer benefits, register for PAYE with HMRC and run payroll monthly. You must file RTI each pay period and consider P11D for benefits after the tax year. The GOV.UK page on registering as an employer sets out the timing.

Assess your auto-enrolment pension duties from day one. If you need to run a staff pension scheme, choose a provider (e.g. NEST), decide whether to use up to 3 months’ postponement, issue the statutory letters, and set contributions in payroll.

Complete the Declaration of Compliance to The Pensions Regulator within 5 months of your duties start date, and plan for re-enrolment every 3 years.

Director-only companies still need to register for PAYE if paying them a salary but they may have limited duties under auto-enrolment until additional staff are employed.

6) Assess VAT — Register Now Or Monitor The Threshold

You must register when taxable turnover exceeds the VAT threshold on a rolling 12-month basis, or if you expect to exceed it in the next 30 days.

Once registered, file VAT returns under Making Tax Digital (MTD) using compatible software, like Xero.

Even below the threshold, voluntary registration can help if your customers are VAT-registered.

Read the GOV.UK guide on when and how to register for VAT.

7) Check CIS Position (If Relevant)

Contractors in the construction industry must register, verify subcontractors and file monthly CIS returns. Subcontractors may have tax deducted at source.

The Construction Industry Scheme overview explains who must register and how it works.

8) Keep Compliant Records From Day One

HMRC expects accurate records of sales, purchases, payroll, dividends and mileage, and Companies House expects statutory registers and board minutes. Keep digital copies of invoices and receipts.

Use a month-end checklist covering bank reconciliations, aged debtors and creditors, payroll journals and VAT reviews.

Good records mean faster year-end and fewer HMRC queries.

9) Know Your First-Year Filing Deadlines (And get set up)

Before the deadlines, set up a Government Gateway account and note your Company UTR (and any PAYE & VAT numbers) when they arrive.

Authorise your accountant for Corporation Tax, PAYE and VAT so they can deal with HMRC on your behalf.

Deadlines at a glance:

Companies House:

  • First accounts: usually due 21 months after incorporation.
  • Subsequent accounts: due 9 months after each year-end.
  • Confirmation Statement: due every 12 months.

HMRC:

  • Company Tax Return (CT600) with iXBRL accounts & computations: due 12 months after the accounting period ends.
  • Corporation Tax payment: due 9 months and 1 day after the period end.

10) Plan For Year-End Early

Great year-ends are won in the final quarter.

Clean up bookkeeping, fix coding and chase missing bills.

Schedule a pre-year-end review to consider tax planning, capital allowances, pension timing and dividends.

Non-Tax Bonus: Put Insurance And Key Contracts In The Company’s Name

Make the company the legal counterparty from day one. Policies and contracts in a director’s personal name can weaken limited liability, complicate VAT recovery and create disputes over who owns the rights or owes the obligations.

Cover the essentials:

  • Insurance policies should name the company as the policyholder. If you employ staff, employers’ liability insurance is almost always a legal requirement with a minimum £5 million cover limit, and the certificate must be available to staff.

  • Common policies to consider include public liability, professional indemnity, cyber and contents. Align renewal dates with your financial year for easier budgeting and comparisons.

  • Put key supplier, landlord, software, telecoms, hosting and vehicle agreements in the company’s name, not the director’s. Paying from the company bank account is not enough if the contract is personal.

  • Ask suppliers to issue VAT invoices addressed to the company’s full legal name and registered office to support accurate bookkeeping and potential VAT recovery.

  • Keep a contracts register listing renewal dates, notice periods and key contacts. Store copies alongside your statutory registers.

Non-Tax Bonus 2: Register with ICO for data protection (if applicable)

Most UK limited companies that process personal data electronically (e.g., client names/emails, payroll, CCTV, website enquiries) must register with the Information Commissioner’s Office (ICO) and pay a small annual data protection fee, unless an exemption applies.

Use the ICO’s quick self-assessment to check. In practice many SMEs need to register.

Common Pitfalls To Avoid

  • Using the business bank account for personal expenses.
  • Paying dividends without enough distributable profits.
  • Not properly documenting dividends.
  • Not keeping accurate records of the directors loan account.
  • Missing the Confirmation Statement.
  • Not registering PAYE when paying directors.
  • Late VAT registration and lost input VAT on early costs.
  • No monthly reconciliations, leading to delays, less tax planning and higher fees.
  • Not putting contracts in the business name.
  • Not registering with the ICO.

What This Means For You

Treat the first twelve months as a system you set once and then run. A few early decisions on ARD, payroll and VAT save time and stress later.

Whether you are in Birmingham or anywhere in the UK, our remote support makes it easy to stay on top of limited company compliance UK-wide.

Quick Checklist

  1. Set ARD, confirm addresses, calendar deadlines.
  2. Open a business bank account and connect bank feeds.
  3. Put all contracts in the business name.
  4. Set a bookkeeping process and stick to it.
  5. Decide salary and dividends; register PAYE if paying anyone.
  6. Assess pensions (auto-enrolment) if paying anyone.
  7. Assess VAT position; register or monitor.
  8. If in construction, sort CIS.
  9. Set up Government Gateway; note Company UTR (and PAYE/VAT numbers).
  10. Authorise your accountant (64-8) for CT, PAYE, VAT.
  11. Register with the ICO for data protection (if applicable).
  12. Keep minutes, dividend vouchers and a tidy Director’s Loan Account.
  13. Plan your year-end three months out.

FAQs on Your Limited Company First Year

Do I need PAYE if I’m the only director?

Yes, in almost all cases, if you pay any salary you must register and file RTI on or before payday. The GOV.UK employer registration page confirms this requirement.

Do I have to register for VAT immediately?

Only when you exceed the threshold or expect to in the next 30 days. Voluntary registration can still help where your customers are VAT-registered.

When are my first accounts due?

Usually 21 months after incorporation for your first set, then 9 months after year-end in later years.

When is my Corporation Tax due?

Payment is due 9 months and 1 day after the period end; the CT600 filing is due 12 months after the period end.

Ready To Set Up Correctly And Stay Compliant?

If you’d like help with company formations, Xero setup, payroll, VAT or CIS, and a clean year-end plan, our Chartered Accountants can handle it for a fixed fee with friendly, remote UK-wide support. Start with our tax and accounting services for companies or get in touch via our contact page.

Disclaimer

This article is provided for general informational purposes only and does not constitute tax, legal, accounting, or financial advice. The information is based on UK law and HMRC guidance as at the date of publication, but rules and interpretations may change. We do not accept any liability for actions taken, or not taken, based on this content. Always seek tailored advice from SCCS Accountants before making financial or business decisions.