It's Tax Time: How To Stay Organised When Paying Business Taxes

Nobody likes the dreaded T word, but taxes are an inevitable part of running a business. Everyone needs to pay them, yet they get a terrible reputation for being confusing and stressful. While this is partially true there’s definitely a sense that some business owners are nowhere near as organised as they should be come tax season. 

Consequently, this post will talk more about business taxes and the best ways to remain organised. It’ll help you understand when you need to pay tax and how to manage your bill so it doesn’t come as a surprise - and so you avoid any tax penalties. 

Step 1: Figure Out What Type Of Business Tax To Pay

Let’s begin with one of the most complicated aspects of paying business taxes: what tax do you actually pay? Well, it all depends on the classification of your business: 

• Sole Trader: This basically means you’re self-employed and haven’t registered your business as a limited company. As a result, you’ll pay income tax and National Insurance Contributions every year via a Self Assessment tax return. The due date is normally the 31st of January for the previous tax year. E.g. January 2026 for tax year 24/25. 

• Limited Company: If you register your business as a limited company, you will pay Corporation Tax on your earnings. This requires a company tax return that’s due 9 months after the end of your accounting period. As the business owner, you will also pay income tax through your self-assessment for any personal earnings. 

• VAT-Registered: Some companies in the UK need to register for VAT, which means they make quarterly VAT returns. You have to pay VAT a month and seven days after the end of each quarter. 

To give you some context, most small business owners register as sole traders, especially if they don’t have employees or earn over the highest tax rate threshold. If you earn more than £90,000, then you technically need to register for VAT. Opting to become a limited company is more of a personal preference - it can help you pay less tax on larger profits, and it does limit personal liability by keeping your business tax separate from personal earnings. 

Step 2: Keep Both Paper & Digital Documents 

After working out what type of tax you’ll pay, you can start organising things to make the process easier. Begin by storing and logging all the necessary tax-related documents, including: 

• Contracts
• Invoices
• Receipts
• Bank Statements

The more information you have about business expenses or income, the better. It lets you keep track of everything so you know exactly what to type in when filing your tax returns. Moreover, you should have both physical and digital copies of everything. 

Why? Because what if your business suffers a cyber attack that wipes all of its data? You’ll have no records of anything, which makes it virtually impossible to file an accurate tax return. Keeping physical documents acts as a nice backup in case the digital security systems fail. You should keep these documents away from your business to provide another layer of security. Rent storage space at a local self-storage facility, and you’ll keep your tax documents behind lock and key at all times. 

At this stage, you now have clear logs of all the important financial information, including evidence of expenses, and so on. 

Step 3: Be Aware Of The Deadlines

Make a note in your digital calendars about the tax deadlines. Then, set reminders for one month, two months and three months before those deadlines. This will help you remember that these important dates are coming up, so you can prepare for things and avoid a delayed tax payment. 

Here are the main tax deadlines and dates to be aware of if you’re filling as a sole trader:

• Every tax year runs from April to April
• You must register for Self-Assessment by the October of the year before your first payment is due. E.g. October 2025 for a tax return in January 2026
• 31st October is the deadline to submit a paper tax return
• 21st January is the deadline to submit an online tax return
• 31st January is the deadline to make your first payment for the tax year

If you’re a limited company, then these dates mean nothing when paying corporation tax. Instead, HMRC designates an “account period” when you register your company. As noted earlier, your tax deadline will be 9 months following this. E.g. Your account period finishes at the end of January, which means your tax is due in October. 

We already spoke about VAT companies earlier; your deadlines are 1 month and 7 days after the end of each financial quarter. 

Step 4: Work Out What You Owe Early On

The benefit of tax returns is that you’re given a hefty chunk of time to determine what you owe. You can start a self-assessment tax return for your small business in April and have until January the following year to make a payment. That leaves you with nine months to prepare - which means you can figure out a budget or pay monthly to avoid paying a massive chunk in one go come January. 

You can use accounting software to do this - some of the modern ones come with incredible technology like artificial intelligence that can predict your tax summary before the tax year is over. Alternatively, work with an accountant and they’ll help you understand what you owe as soon as possible, then craft a budget to make tax manageable. 

Step 5: Always Save Money

A quick final step to end this post. Always save money to prepare for tax payments. Generally speaking, you should set aside 30-40% of your earnings every month to cover your tax bill. The worst case scenario is you end up with extra money saved away because you overestimated. That’s a lot better than seeing your tax bill and realising you don’t have enough money to pay! 

Yes, tax is frustrating and boring, but you’ve got to deal with it. Use these five steps to understand the process a bit better and be more prepared when the taxman comes calling.