Month: January 2026

https://www.gov.uk/government/statistics/companies-register-activities-statistical-release-april-2024-to-march-2025/companies-register-activities-april-2024-to-march-2025
https://www.business.gov.uk/support/business-structures-governance-and-ethics/comparing-business-structures

How to register a business

Registering a business starts with two key decisions: choosing the business type that’s right for you and following the registration process accurately. While it can feel daunting at first, for most independent businesses the process is short, straightforward, and completed online.

The steps you need to take depend on whether you’re registering as a sole trader or setting up a limited company, both common options for freelancers, contractors, and micro-businesses. The sections list each route clearly and simply.

Registering as a Sole Trader

Choose your business name
Register for self-assessment with HM Revenue & Customs
Set up a simple system for tracking income and expenses
Understand your annual self-assessment tax deadline

Typically, you will register as a sole trader if you’re earning income from a side business, over £1000. You could be a freelancer, contractor and employer, although you could also be registered as a limited company.

Registering a Limited Company

Choose a company name
Check availability and restrictions
Register with Companies House
Appoint directors and shareholders
Set up a business bank account

If you’re unsure which structure suits your situation best, it’s worth taking time to understand the differences before registering, as changing later can involve additional admin and cost.

How much does it cost to register a business in the UK?

Core registration costs

Sole trader registration: £0
Limited company registration: £12 (online)

Other costs to consider

While optional, these can improve efficiency and reduce risk:

Accounting or bookkeeping software
Accountant support
Business insurance
Website and domain
Trademarks
Licences or certifications

Choosing and registering a business name

There is so much to consider choosing your name and it can be a fun part of starting out. Yet, as with many official processes, rules apply. Whilst you may want to delve into brand and product considerations, the important thing is to register the chosen name exactly right. No spelling errors, using appropriate words and avoiding a name already registered.

Business name rules

Sole traders can trade under their own name or a business name
Limited companies must use a unique registered name
Certain words require permission (e.g. “Bank”, “Royal”)
Consider ‘sensitive’ words. Names must not be misleading or offensive

Checking name availability

Before committing, check:

Companies House name availability
Domain name availability
Social media handles

Other than your Companies House name; domain and social media, names can be adapted, however keeping things consistent can avoid future rebranding costs and confusion.

Trading name vs registered name

This is a common area of uncertainty.

Registered name: the official legal name (used on records and filings)
Trading name: the name you use publicly with customers

You can trade under a different name as long as:

You clearly disclose the registered name on invoices and websites
You’re not misleading customers

This flexibility is useful for freelancers or businesses running multiple brands.

Should you trademark your business name?

Registering a business name does not automatically protect it and it could lead to costly battles if you have to challenge another business, or if it has not been trademarked.

What a Trademark does

Protects your brand name, logo, or slogan
Prevents others in your industry from using it
Strengthens your legal position

How to Trademark a name

In the UK, trademarks are registered through the Intellectual Property Office.

For many micro businesses, trademarking isn’t urgent but it’s worth considering if your brand becomes central to your value. You could face future legal battles or challenges if someone opts for the same name or similar.

Common mistakes made by independent businesses

Most registration issues don’t come from carelessness; they come from rushing decisions or not knowing what matters yet. Being aware of the most common pitfalls can save time, money, and unnecessary stress.

Choosing the wrong business structure

Take time to understand the differences between a sole trader and a limited company before registering. For many early-stage or one-person businesses, starting as a sole trader offers flexibility and simplicity and you can always change structure later if your business grows or your needs change.

Mixing personal and business finances

Set up a dedicated business bank account as early as possible. Even when it’s not legally required, keeping finances separate improves organisation, saves time, and makes it easier to understand your business performance.

Choosing a business name already in use

Always check name availability before registering. Search company registers, domain availability, and online platforms to ensure your chosen name is distinct and usable.

Spelling errors in business names

Double-check spelling carefully and review naming rules before submitting your application. Make sure any restricted or sensitive terms are permitted or choose a simpler alternative that avoids delays.

Using an unsuitable registered address

Consider carefully which address you use when registering. If privacy is important, alternatives such as registered office services can provide a professional solution without exposing your home address.

Appointing an ineligible director

Before registering a limited company, ensure all directors meet eligibility requirements and understand their legal responsibilities. This avoids complications and protects the business from avoidable risk.

Paperwork, accounts, and ongoing responsibilities

Admin is rarely the reason people start a business, but it plays a vital role in keeping everything running smoothly behind the scenes. Clear records, timely filings, and the right financial setup don’t just help you stay compliant; they also save time, reduce stress, and make it easier to understand how your business is really performing.

Accounting and tax

Once your business is registered, you’ll need to ensure you’re up on tax reporting to help track performance throughout the year.

Keep accurate records of income and expenses
Understand tax deadlines
File self-assessment or company accounts on time

Business bank accounts

Limited companies are legally required to have a separate business bank account, as the company is a distinct legal entity. While sole traders aren’t required to do this, having a dedicated business account is strongly recommended.

Keeping business and personal finances separate makes record-keeping far simpler, improves clarity, and can save significant time when it comes to tax returns or working with an accountant.

Business insurance

The type of insurance you need depends on the nature of your work, but it’s an important part of managing risk as your business grows.

Common types to consider include public liability insurance (to protect against claims from third parties), professional indemnity insurance (for advice or services provided), and employers’ liability insurance if you hire staff.

Summary

Every independent business is unique, but the foundations are the same. Registering your business correctly helps you stay compliant, avoid unnecessary costs, and focus on the work you care about.

Admin doesn’t need to be overwhelming. With the right setup from the start, it becomes a quiet system working in the background, supporting your independence, not restricting it.

For those concerned about the repercussions of errors there are business registration companies that, for a cost, will assist you with the process. For other unexpected costs, make sure you consider the right business insurance for your set up.

Once registered you’ll need the right business insurance

Protectivity can offer a variety of business insurance policies, helping protect your income, your reputation, and your ability to keep trading if something goes wrong.

Whether you’re a sole trader, freelancer, or running a limited company, having the right cover in place can provide additional support alongside your tax compliance, especially as your business grows or takes on new responsibilities.

Explore the range of business insurance policies offered by Protectivity.

Sources:

*Disclaimer – This blog has been created as general information and should not be taken as advice. Make sure you have the correct level of insurance for your requirements and always review policy documentation. Information is factually accurate at the time of publishing but may have become out of date.

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09:46:13 GMT • 29 January 2026

What is a Purchase Order?

27 January 2026

•

9 mins read

Contributors

My main focus is managing the blog and product content for the Protectivity website ensuring everything aligns wi...

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Managing finances is one of the most demanding aspects of running a small business. As operations grow, so do the number of suppliers, invoices, and payments that need to be tracked accurately. Without clear systems in place, this can quickly lead to confusion, overspending, or disputes. One straightforward but highly effective tool that helps bring order to this process is the purchase order.

Purchase orders provide businesses with a clear record of what has been agreed before any money changes hands. According to guidance published on GOV.UK, businesses are expected to keep accurate records of financial transactions and agreements to meet accounting and tax obligations. Purchase orders support this requirement by formally documenting purchases in advance, rather than relying on informal communication.

This guide explains what purchase orders are, how they work in practice, the role of purchase order numbers, and how purchase orders link with invoicing and payment systems. It is designed to help UK small business owners decide whether purchase orders could improve financial control and reduce risk.

What is a Purchase Order (PO)?

A purchase order (PO) is a formal document issued by a buyer to a supplier that confirms the details of a proposed purchase. It sets out what goods or services are being ordered, the quantity, the agreed price, delivery timescales, and payment terms.

Once the supplier accepts the purchase order, it becomes a legally binding agreement. This means both parties are committed to the terms outlined in the document. For the buyer, this offers reassurance that pricing and delivery conditions are fixed. For the supplier, it provides confidence that payment will be made once the order is fulfilled.

Although purchase orders are often associated with larger organisations, they can be equally valuable for small businesses and sole traders. Any business that orders goods or services on credit, works with multiple suppliers, or wants clearer oversight of spending can benefit from using purchase orders consistently.

What are Purchase Orders used for?

Purchase orders act as a control point between deciding to buy something and paying for it. Rather than relying on emails or verbal agreements, a purchase order clearly records the transaction in advance and ensures everyone involved understands what has been agreed.

In practical terms, purchase orders are used to:

Control spending by ensuring purchases are approved before money is committed

Reduce misunderstandings by clearly documenting prices, quantities, and terms

Simplify invoice checking by allowing invoices to be matched to approved orders

Improve cash flow visibility by showing upcoming financial commitments

They are particularly useful for businesses with multiple suppliers or more than one person involved in ordering. By creating a clear audit trail, purchase orders reduce the likelihood of disputes and help businesses stay organised as they grow.

Purchase orders also support better budgeting. By raising a PO before committing to spend, businesses gain visibility over upcoming costs, allowing them to plan payments more effectively. When combined with reliable payment tools, this can significantly reduce financial pressure. To find out about choosing the right setup, take a look at our blog on best payment systems for small businesses in the UK.

What is a Purchase Order Number?

A purchase order number is a unique reference assigned to each purchase order. Its purpose is to allow both the buyer and supplier to track the order throughout its lifecycle, from creation through to payment.

The purchase order number links together all related documents, including delivery notes and invoices. When a supplier submits an invoice, referencing the PO number allows the buyer to quickly verify that the charges match what was originally agreed. This reduces delays, avoids duplicate payments, and simplifies bookkeeping.

As a business grows and transaction volumes increase, PO numbers become increasingly important. Without them, it can be difficult to trace orders or resolve disputes efficiently, particularly when several purchases are made with the same supplier.

How do Purchase Orders work?

While systems may vary, the way purchase orders work is generally consistent across businesses. The process begins when a need for goods or services is identified. Before placing the order, a purchase order is created and approved, ensuring the spend is authorised.

Once sent to the supplier and accepted, the supplier delivers the goods or completes the service as agreed. After delivery, the supplier issues an invoice that references the purchase order number. The buyer then checks the invoice against the original purchase order before making payment.

This process creates a clear audit trail and ensures businesses only pay for what they have approved and received. From an accounting perspective, this aligns with HMRC expectations around maintaining accurate records and supporting evidence for business expenses.

How to create a Purchase Order

Creating a purchase order does not need to be complicated. Many small businesses begin with simple templates that include all the essential details. As operations become more complex, accounting software can automate much of the process and reduce manual errors.

A purchase order typically includes business and supplier details, a description of the goods or services, pricing, delivery information, and payment terms, along with the unique PO number. What matters most is consistency. Using the same format and numbering system makes purchase orders far easier to manage over time.

As financial administration grows, some businesses choose to seek professional support to ensure systems remain efficient and compliant. If you are unsure whether your current processes are fit for purpose, our guide on hiring an accountant for a small business explores when expert advice can add value.

How to raise a Purchase Order in a Small Business

To “raise” a purchase order simply means to formally issue it to a supplier before any work begins. This step is important because it confirms that the purchase has been approved and that both parties understand the agreed terms.

For small businesses, raising purchase orders can feel like an extra administrative step, but it often saves time later. Clear documentation reduces the need for back-and-forth communication and makes invoice checking far more straightforward. Even in businesses with small teams, purchase orders can help establish financial discipline and accountability.

Purchase Orders and Invoicing: what’s the difference?

Purchase orders and invoices are closely linked but serve different purposes. A purchase order is issued before goods or services are supplied and confirms what the buyer has agreed to purchase. An invoice is issued after delivery and requests payment for what has been supplied.

When used together, purchase orders and invoices create a strong financial control. The purchase order confirms approval, while the invoice confirms the charge. Matching the two ensures businesses only pay for what was agreed and received.

This is particularly important for VAT-registered businesses, as HMRC requires accurate records to support VAT returns and expense claims. Purchase orders help demonstrate that costs were legitimate business expenses.

Do Small Businesses need Purchase Orders?

There is no legal requirement for most small businesses to use purchase orders. However, many find them increasingly valuable as operations grow and transaction volumes increase.

Purchase orders are especially useful if you:

Work with multiple suppliers or contractors

Place regular or repeat orders

Want clearer control over spending and approvals

Need stronger financial records for tax, funding, or insurance purposes

They can also improve professionalism. Suppliers often view purchase orders as a sign that a business is organised and financially reliable, which can strengthen working relationships and reduce the risk of disputes.

Purchase Orders and business risk management

Although purchase orders are primarily an administrative tool, they also play an important role in managing business risk. Clear documentation helps reduce disagreements with suppliers and provides evidence if disputes arise.

From a business insurance perspective, accurate purchasing records support smoother resolution of claims where supplier issues disrupt operations. They also demonstrate that a business has appropriate financial controls in place, which can be important when dealing with insurers, lenders, or regulatory bodies.

Why Purchase Orders are worth considering

Purchase orders provide clarity, control, and accountability — all of which are particularly valuable for small businesses managing limited time and resources. They help prevent disputes, improve visibility over spending, and support compliance with UK accounting expectations.

While they introduce a small additional step into the purchasing process, the long-term benefits often outweigh the effort. By documenting agreements clearly and linking purchasing with invoicing and payments, purchase orders can help businesses operate more smoothly and with greater confidence.

Protect your business beyond Purchase Orders with Business Insurance

Using purchase orders helps you control spending, reduce disputes, and keep clear records — but it doesn’t protect you from every risk your business could face. Even with strong financial systems, unexpected events like client claims, accidents, or damage to your tools and equipment can still have a significant financial impact.

This is where Protectivity’s Business Insurance comes in. The policy can be tailored to your business and can offer cover such as public liability, professional indemnity, equipment cover, employers liability and more (depending on your business profession) — helping protect you if a claim or loss occurs.

For small businesses that raise purchase orders, this kind of insurance can work alongside your purchasing controls to safeguard your income, reputation and ability to keep trading if the unexpected happens. Insurance offers a safety net that purchase orders on their own cannot provide, giving you confidence to focus on growth and daytoday operations.

Find out more and get a quote today!

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09:19:13 GMT • 22 January 2026

What is the National Minimum Wage for employers

By Chris Trotman

22 January 2026

•

6 mins read

Contributors

Chris Trotman

Chris has been with Starpeak Insurance Solutions for 5 years. Before starting with the company, Chris was involve...

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The National Minimum Wage plays a crucial role in protecting workers’ pay while shaping employment costs for businesses across the UK. Over the last two years, minimum wage rates have risen sharply, reflecting cost-of-living pressures and commitments made by the UK Government to raise pay at the lowest end of the labour market. According to gov.uk, the most recent increases represent some of the largest annual uplifts since the minimum wage was introduced.

This guide explains what the National Minimum Wage is, how it changed in 2024 and 2025, how it compares to average UK earnings, and what these changes mean in practice for employers – particularly small businesses managing rising operational costs. We also explore sector-specific impacts and Employers’ Liability considerations, helping employers navigate compliance while managing costs.

What is National Minimum Wage UK?

The National Minimum Wage is the legal minimum hourly pay that most workers in the UK are entitled to receive. It applies to employees and workers and varies depending on age and whether the individual is an apprentice.

Alongside the National Minimum Wage, the UK also operates the National Living Wage, which is the highest statutory rate and applies to adult workers. According to the Government website (gov.uk), these rates are reviewed annually following recommendations from the independent Low Pay Commission, which considers economic conditions, employment levels, and the cost of living.

Employers are legally required to pay the correct rate. HM Revenue & Customs, acting on behalf of the UK Government, enforces compliance. Underpayment can result in penalties, repayment of arrears, and public naming of non-compliant businesses, as outlined on the Government website.

What’s the new National Minimum Wage pay rate?

April 2024 changes

According to official guidance published on gov.uk, minimum wage rates increased on the 1^st of April 2024, including a significant rise to the National Living Wage. The UK Government stated that the uplift was intended to support low-paid workers while maintaining economic stability.

Minimum wage 2025

From the 1^st of April 2025, further increases came into force. According to the Government website:

The National Living Wage increased to £12.21 per hour for workers aged 21 and over
The 18–20 rate rose to £10.00 per hour
The 16–17 and apprentice rate increased to £7.55 per hour
The accommodation offset increased to £10.66 per day

The UK Government has confirmed that these increases are designed to move minimum pay closer to typical earnings while supporting businesses’ ability to create and sustain jobs.

What is the minimum wage compared to average pay?

To put minimum wage levels into context, it is useful to compare them with average UK earnings.

According to the , median hourly pay for full-time employees in the UK is around £18 per hour, with median annual earnings of approximately £37,000–£39,000 before tax. This shows that, even after the 2025 increase, the National Living Wage remains significantly below the UK average wage.

The UK Government has stated that the National Living Wage is set as a proportion of median earnings rather than matching average pay outright. This approach is intended to protect low-paid workers while limiting the risk of job losses, as explained in Government publications.

Sector-specific impacts

Minimum wage changes affect some industries more than others. Key examples include:

Hospitality and retail: These sectors employ a high proportion of minimum-wage staff. Wage rises increase payroll costs but can improve retention, motivation, and service quality.
Social care: Higher wages help retain essential staff but increase costs for small care providers and charities.
Youth employment and apprenticeships: Rising rates encourage young people to enter the workforce, but businesses providing training may need to adjust their budgets.

Understanding sector-specific impacts allows employers to plan budgets, adjust pricing, and structure hours to remain profitable while complying with statutory wage obligations.

How rising minimum wages affect employers and small businesses

For employers, especially small businesses, rising statutory wage rates can have a noticeable impact:

Payroll costs increase, especially in sectors with many lower-paid roles
Employers may need to review staffing levels, pricing strategies, or operating hours
Businesses face combined cost pressures, including wage increases alongside National Insurance, rent, and utilities

However, the UK Government and Low Pay Commission have also highlighted potential benefits, including improved staff retention, reduced recruitment costs, and higher motivation – all of which can offset some of the financial pressure over time.

Employers’ liability considerations

From an Employers’ Liability perspective, paying the correct minimum wage is a key compliance obligation. Incorrect payment can expose businesses to:

Legal claims and financial penalties
Employment tribunal cases
Reputational damage and loss of staff trust

Practical advice for employers includes:

Regularly auditing payroll systems to ensure compliance
Training HR staff on minimum wage updates
Documenting working hours and pay rates to provide evidence in case of disputes
Planning for wage increases in budgeting and pricing strategies

Compliance with the National Minimum Wage is not just a legal requirement – it is also an essential part of business operations risk management. Maintaining accurate pay practices reduces the likelihood of costly claims and helps protect business assets.

Conclusion

The National Minimum Wage and National Living Wage remain central to employment law in the UK. Between 2024 and 2025, rates rose significantly, reflecting the UK Government’s objective of improving pay for low-income workers while maintaining economic balance.

For employees, these changes provide greater income security. For employers, they underline the importance of accurate payroll management, legal compliance, and forward planning. Understanding sector-specific impacts and the Employers’ Liability implications ensures businesses can navigate wage changes confidently while protecting staff and business operations.

By combining awareness of wage trends, compliance obligations, and practical business planning, employers can manage costs effectively while supporting their workforce and meeting statutory responsibilities.

Employers’ Liability insurance from Protectivity

As a small business owner, having Employers’ Liability insurance is essential because it protects your business financially and legally if an employee is injured or becomes ill as a result of their work for you. Accidents can happen even in workplaces with strong health and safety practices, and without proper coverage, you could face significant compensation costs, legal fees, and potential regulatory fines.

This type of insurance also shows that you take your responsibilities seriously as an employer. It helps you attract and retain staff by giving them confidence that they are protected while working for your business.

Additionally, Employers’ Liability insurance provides peace of mind, ensuring your business can continue to operate without the threat of financial claims. You can explore tailored cover for your business and get a quote today.

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Chris Trotman

12:44:57 GMT • 19 January 2026

What is an SME? Small business status explained

20 January 2026

•

10 mins read

Contributors

My main focus is managing the blog and product content for the Protectivity website ensuring everything aligns wi...

If you run an independent business in the UK, whether you’re a freelancer, sole trader, or running a small, limited company, you’ve probably come across the term SME. It often appears on forms, insurance applications, funding information, or government guidance, sometimes without much explanation.

In fact, over 99% of businesses in the UK are classed as SMEs, which means most people working for themselves or running small businesses are already part of this group.

But what does SME actually mean? And why does it matter for your business?

SME stands for Small or Medium-sized Enterprise. In simple terms, it’s a way of describing the size of a business, rather than how it’s set up legally. A sole trader can be an SME, a limited company can be an SME, and a business can fall under the SME umbrella whether it’s just starting out or has been established for years.

In most everyday UK contexts, an SME is a business with fewer than 250 employees, with many independent businesses falling into the micro business category.

This guide explains what SME means in the UK, how it’s defined, who qualifies, and when your SME status becomes important, using clear, practical information designed to support small, independent businesses.

What counts as an SME in the UK?

In the UK, SME is a broad term that’s used in lots of everyday business situations, from government support and funding, to insurance, finance, and supplier forms.

Most commonly, SMEs are grouped like this:

Business size	Employees	Turnover / balance sheet (approx.)
Micro	Fewer than 10	Up to €2m
Small	Fewer than 50	Up to €10m
Medium	Fewer than 250	Up to €50m turnover or €43m balance sheet

Source: gov.uk/government/publications/fcdo-small-to-medium-sized-enterprise-sme-action-plan

These categories are widely referenced by UK Government departments and regulators, even though the thresholds are shown in euros, the figures are equivalent in GBP(£s).

If you’re a sole trader, freelancer, or small service-based business, you’ll almost always fall into the micro business category.

It’s also worth knowing that not every organisation uses exactly the same definition. So, if you’re filling in a form or applying for something specific (like insurance, finance, or a grant), it’s always best to follow the definition they provide.

SME size vs business structure

It’s very common for small business owners to wonder whether SME status depends on how their business is set up.

Put simply:

Business structure is about how your business is legally organised

(for example, sole trader, partnership, or limited company)

SME status is about the size of your business

They’re connected – but they’re not the same thing.

For example:

A one-person limited company is usually classed as a micro-SME
A partnership with a handful of staff is still an SME
A freelancer or self-employed person with no employees is typically considered a micro business and SME

So, if you run an independent business; whether that’s pet care, hairdressing, catering, creative services, or another specialist trade, it’s very likely you already fall under the SME umbrella.

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What is the SME business landscape in the UK?

SMEs play a vital role in the UK economy and make up the vast majority of businesses operating today. While large companies often get the most attention, it’s small and independent businesses that keep many local communities and specialist services running.

In fact, there are around 5.7 million private sector businesses in the UK, and, as mentioned, over 99% of them are classed as SMEs. Together, these businesses employ around 60% of the private sector workforce, and around three-quarters operate with no employees at all beyond the owner. This reflects how common sole traders, freelancers, and very small teams are across the country.

For many independent business owners, this can be reassuring. Running a small business, even on your own, isn’t the exception in the UK economy, it’s more common than you might think.

Common SME sectors

SMEs operate across every industry, but they are especially common in sectors built around skills, services, and personal expertise. These include construction, professional services (such as consultants, IT specialists, marketers, designers, and legal professionals), wholesale and retail, and a wide range of trades, creative industries, and digital services.

This also covers many niche, service-based businesses:

Pet care and pet grooming
Hair and beauty
Catering
Photography
Other creative or hands-on professions.

These types of businesses are often independently run, locally focused, and built around specialist knowledge or personal service.

If you run a small business in the UK, there’s a very strong chance you’re already part of this SME majority, alongside millions of other independent businesses doing similar things in their own communities and sectors.

When does SME status actually matter?

SME status isn’t something most small business owners think about every day, and that’s completely normal. For many sole traders, freelancers, and small service-based businesses, it only really comes up at certain moments.

Below are some of the main situations where SME status is commonly used.

1. Business registration and reporting

For limited companies, the size of your business can influence how certain administrative and reporting requirements work.

This can include:

Financial reporting requirements
Whether an audit is required
How accounts are prepared and filed

These rules are designed to reflect the scale of a business, so smaller companies often have simpler requirements. As a business grows, these obligations can change, which is why SME size is sometimes reviewed over time.

2. Tax, finance, and funding

SME status is also commonly referenced when businesses apply for finance or support. You may see it used when:

Applying for business loans or finance
Accessing government-backed schemes
Assessing eligibility for grants, support, or incentives

Different lenders and organisations may apply slightly different thresholds, depending on what they’re offering. This is why it’s important to answer questions accurately and follow the definition provided in each specific situation.

3. Insurance and risk assessment

This is one of the most practical and relevant times SME status comes into play for independent businesses.

When arranging business insurance, insurers will usually ask about:

Number of employees
Turnover
Business activities
Legal structure

These details help insurers understand how your business operates day to day. Based on this information, they can determine:

What type of cover is appropriate
How your level of risk is assessed
Whether a policy is suitable and valid for your business

Being clear and accurate about your business size and setup helps make sure you’re properly protected, without paying for cover you don’t need or risking gaps in protection.

4. Working with clients and suppliers

In some cases, businesses are asked to confirm their SME status when working with clients or suppliers.

This is especially common when dealing with larger organisations or public sector bodies, where SME classification may be part of:

Supplier onboarding checks
Risk and compliance processes
Their own internal or regulatory reporting

For most small businesses, this is simply a classification exercise rather than a judgement and being prepared can make the process quicker and easier.

How SME’s are offered support

Running a small business, especially on your own or with a small team, can sometimes feel like you’re expected to figure everything out as you go. The good news is that there’s a wide range of support available to SMEs, much of it designed specifically with independent and smaller businesses in mind.

For many business owners, a helpful starting point is guidance from the UK Government, which brings together information on funding, employment, tax, and day-to-day responsibilities in one place. From there, you can explore more tailored support depending on what stage your business is at.

Common types of SME support include:

Local and regional business hubs

Offering practical advice, training, and signposting to support in your area.

Chambers of Commerce and business networks

Providing networking opportunities, business guidance, and local insight.

Support organisations for small businesses

Such as membership bodies focused on the needs of sole traders and small companies, such as the Federation of Small Businesses.

Setting up an SME

For those who are just starting out, there is guidance available to help with the practical steps of setting up a business. This includes registering your business, understanding your tax responsibilities, and keeping basic financial records from the outset.

Support is also available when it comes to finance and loans. This can include business loans and government-backed finance schemes that are often aimed at SMEs, helping independent businesses access funding when they need it.

As your business develops, you may also reach a point where you’re ready to employ people. There is support available to help you understand employer responsibilities, including payroll, workplace pensions, and other obligations that come with taking on staff.

Overall, SME support in the UK reflects the fact that most businesses are small, independent, and service-based. Whether you’re just starting out or gradually growing, there are resources available to help you navigate each stage with more confidence and clarity.

Why SME status matters for insurance

Business insurance is usually built around a few core details, including the size of your business, the activities you carry out, and your level of risk exposure. Whether you work on your own or employ others also makes a difference. These factors help insurers understand what type of cover is appropriate and ensure your policy is set up correctly.

For many small businesses, this includes cover such as public liability insurance, which can help protect you if a third party is injured or their property is damaged, and employers’ liability insurance, which is a legal requirement if you employ staff.

As your business evolves; for example, if your turnover changes, you take on help, or your services expand your insurance needs can change too. Reviewing your cover from time to time can help make sure it still reflects how your business operates today.

Protect your SME with Business Insurance from Protectivity

Protectivity offers affordable business insurance suitable for self-employed, sole traders, limited companies and entrepreneurs, specialising in a wide range of different activities.

Public liability is included with options to add extras such as equipment cover, employers’ liability and other specific industry add-ons.

Explore the full list of business insurance we provide today – or get in touch with our team to discuss your specific requirements.

Sources:
https://www.business.gov.uk/
https://www.fsb.org.uk/media-centre/uk-small-business-statistics
https://www.gov.uk/government/publications/procurement-act-2023-short-guides/supplementary-information-small-and-medium-sized-enterprises-definition-html
https://www.gov.uk/government/publications/fcdo-small-to-medium-sized-enterprise-sme-action-plan/small-to-medium-sized-enterprise-sme-action-plan

Last updated by

09:43:28 GMT • 20 January 2026

Self-Assessment Deadline 2026: When to get help with your tax return

15 January 2026

•

12 mins read

Contributors

My main focus is managing the blog and product content for the Protectivity website ensuring everything aligns wi...

If you’re self-employed, running an independent limited company, or earning income from property, self-assessment is one of those unavoidable parts of business life. For many people, it isn’t the work itself that’s difficult – it’s the paperwork, the rules, and the feeling that you’re expected to understand a system that was never properly explained. If that sounds familiar, you’re far from alone.

The reality is that self-assessment puts the responsibility on you to get things right, even if tax and admin aren’t your strengths. Every year, thousands of independent business owners face late filing penalties, unexpected tax bills, or cash-flow issues simply because they didn’t fully understand the process or left it until the last minute, not because they were careless or doing anything wrong.

In fact, HM Revenue & Customs (HMRC) reported in the first week of January 2026 that 5.65 million people were still yet to file their tax returns, with just four weeks left before the deadline. That number alone shows how common it is to feel behind, unsure, or overwhelmed by it all.

This guide explains self-assessment in straightforward terms, focusing on the areas people most often struggle with, when it makes sense to get help, and how to avoid costly mistakes ahead of the 2026 deadline, while also helping you plan more confidently for 2027 and beyond.

What is self-assessment?

Self-assessment is the system used by HM Revenue & Customs (HMRC) to collect Income Tax from individuals and businesses whose tax isn’t fully handled through PAYE. It’s most commonly used by self-employed people, landlords, and company directors who receive income in different ways throughout the year.

Rather than HMRC calculating everything automatically, self-assessment places the responsibility on you to manage your tax affairs. This means you must:

Report all relevant income accurately
Claim allowable expenses correctly
Submit your return and pay any tax owed on time

The tax year runs from 6^th April to 5^th April, and your self-assessment return covers all income earned during that period, even if the money is paid later.

For independent businesses and individuals, this typically includes trading income, rental income, dividends, and other taxable income that isn’t taxed at source. Understanding what needs to be included and how it should be reported, is a key part of avoiding mistakes later on.

Key self-assessment deadlines for 2026

Knowing your deadlines is critical and one of the most common areas people fall behind.

For the 2024/25 Tax Year (6 April 2024 – 5 April 2025)

Register for self-assessment: by 5^th October 2025 (passed)
Paper return deadline: 31^st October 2025 (passed)
Online return & tax payment deadline: 31^st January 2026

For the 2025/26 Tax Year (6 April 2025 – 5 April 2026)

For the 2026 tax year, income you make this year:

Register for self-assessment: by 5^th October 2026
Online return: by 31^st January 2027
Tax payment due: 31^st January 2028

Miss the January deadline and you’ll face:

An automatic £100 penalty
Daily penalties after 3 months
Interest on unpaid tax

Even if you owe no tax, penalties still apply.

How to register for self-assessment

If this is your first time, you must register with HMRC before you can file. Before you can start, you need a Unique Taxpayer Reference (UTR).

When to register

You’ll need to register by 5^th October following the end of the tax year you need to report. For example, for the tax year 2025-2026, you’ll need to register by 5^th October 2026.

HMRC will send you a Unique Taxpayer Reference (UTR) by post, this can take time, so don’t leave it until the last minute. You can also download the HMRC app, which provides easy access to check your details and obtain further information.

How to file your self-assessment return

Online filing

Most independent businesses file their self-assessment tax return online, either directly through HMRC or using approved accounting software. Online filing is usually the simplest option, with automatic calculations, built-in checks, and a later deadline than paper returns.

Before you can file, you’ll need a Unique Taxpayer Reference (UTR) from HMRC and a Government Gateway ID to access their online services.

If this is your first time filing, it’s worth allowing extra time for registration and setup, as these steps can’t always be completed instantly.

Paper Filing

From 6^th April 2026 (the next tax year) paper filing will no longer be possible. Everyone is expected to adopt the Making Tax Digital process, unless given an exemption directly from HMRC.

Find more about the Making Tax Digital system and deadline.

What information you’ll need to file

Preparation is where many people struggle and where mistakes creep in.

You’ll typically need:

Total business income
Rental income (if applicable)
Allowable expenses
PAYE income (if you also have a job)
Dividend income
Student loan details
Pension contributions

Good records make filing easier, reduce stress, and help avoid overpaying tax.

Who does self-assessment apply to?

Self-assessment applies to more people than many expect, plus you may have different criteria depending on your how you operate.

How your business is structured plays a big role in which taxes you pay, how you report income, and what deadlines apply. Below is a simple overview of how tax responsibilities typically differ across common business types, helping you quickly see what applies to your situation and what you may need to keep in mind as your business grows.

Below is a practical overview of the most common business types and how self-assessment typically applies to each.

Self-employed or a Sole trader

This includes sole traders, freelancers, contractors, and consultants.

If you’re self-employed, you’ll usually:

Pay Income Tax via self-assessment
Pay National Insurance contributions
Have a simpler structure, but personal liability for tax and debts

Freelancers and contractors often have additional complexity, such as:

Multiple income streams
Possible IR35 considerations when contracting

Anyone earning more than £1,000 from self-employment or a side hustle typically needs to register.

Small limited company director

If you’re a director of a limited company, your tax responsibilities are different, even if the company is small or not actively trading.

You may need to file self-assessment if you:

Take a salary and/or dividends
Receive benefits or other untaxed income

Limited companies themselves:

Pay Corporation Tax
Are a separate legal entity
Have additional reporting and filing obligations

This distinction often catches new directors out, especially when mixing personal and company income.

Landlords

Self-Assessment usually applies if you earn income from property, including:

Residential or commercial property
UK or overseas rental income
Jointly owned property (each owner files separately)

Property income has its own rules and allowable expenses, which can make returns more complex than expected.

Partnerships & other income sources

You may also need to complete a Self-Assessment tax return if you earn income alongside your main job or business, or if your income doesn’t fit neatly into a single category.

This commonly includes:

Shared profits through a partnership or joint venture
Side-hustle or second income, such as online selling, freelance work, or gig economy platforms
Other untaxed income, including foreign income, capital gains, or multiple income streams

Side-hustle income is a frequent source of confusion, particularly for people who already pay tax through PAYE. Even if your main job is taxed automatically, additional income over £1,000 in a tax year usually needs to be declared through Self-Assessment.

Where income comes from multiple sources, reporting becomes more detailed, and it’s easier to overlook something. In these situations, checking early, or seeking advice, can help ensure everything is declared correctly and reduce the risk of penalties later.

How to pay your self-assessment tax

Understanding when and how income tax is paid can make a big difference to cash flow, especially for sole traders and self-employed business owners. Rather than paying tax automatically through payroll, income tax is usually settled after you’ve submitted your Self-Assessment return, which can feel unfamiliar if you’re new to running a business.

This section breaks down the main types of income tax payments you might be asked to make, what they mean in practice, and why they sometimes come as a surprise.

Balancing payments

A balancing payment is the amount you owe for the previous tax year once your Self-Assessment return has been submitted and HMRC has calculated your final bill.

This payment is usually due by 31^st January and reflects any tax that hasn’t already been paid through PAYE or payments on account.

Payments on account

If your income tax bill is over £1,000, HMRC may ask you to make payments on account towards the next tax year’s bill. These are split into two instalments:

50% by 31^st January
50% by 31^st July

These advance payments are based on your previous year’s tax bill and are designed to spread the cost, but they can be unexpected, particularly in your first year of trading or after a profitable year.

Payment methods include:

Bank transfer
Debit card
Direct Debit
HMRC app

Late payments

If tax payments are made late, HMRC may apply:

Automatic penalties
Daily interest charges
Enforcement action if the debt is ignored

If you’re struggling to pay on time, contacting HMRC early can sometimes help, as support options may be available.

Common self-assessment mistakes

Most self-assessment mistakes aren’t caused by carelessness, they happen because deadlines are easy to miss, tax rules aren’t always clear, and many people are juggling this alongside running a business. Accountants see the same issues arise year after year, particularly among small businesses and first-time filers who are managing the process themselves.

The most common problems include:

Missing key deadlines, including registration, filing, or payment dates
Misunderstanding payments on account, leading to unexpectedly high tax bills
Errors in reporting, such as under-declaring income or claiming expenses incorrectly

While these mistakes might seem minor at first, their impact can be significant. Even small errors can trigger:

Automatic penalties and interest charges
HMRC enquiries or audits, which take time and energy to resolve
Cash-flow issues, especially if unexpected tax bills arrive at short notice

Spotting risks early, keeping clear records, and asking for help when something doesn’t make sense can prevent most of these issues before they escalate.

How to get help

Knowing when and how to get help can make a significant difference to a smooth process. Tax rules aren’t always intuitive, and as we’ve seen from common errors, small misunderstandings can lead to costly errors, missed reliefs, or unexpected bills.

Getting support is strongly recommended if you’re facing any uncertainty, particularly if:

You’re filing a self-assessment return for the first time, or your circumstances have recently changed
You’re unsure what counts as an allowable expense or how to report different types of income
Your tax bill is higher than expected, payments on account don’t make sense, or you’ve missed a deadline

Even a short conversation with an accountant or tax adviser can clarify your position, highlight potential savings, and help you avoid problems that can otherwise linger for years.

Ways to get support

There are several ways to access help, depending on how much guidance you need:

Official HMRC guidance and helplines, which can help explain deadlines, forms, and basic requirements
Accounting software with built-in support, often useful for straightforward returns and ongoing record-keeping
Professional accountants, bookkeepers, or tax advisers, particularly valuable for landlords, limited company directors, or anyone with multiple income streams

The key is choosing support that matches your situation. For some, a tutorial or software prompt is enough. For others, professional advice can quickly pay for itself by reducing risk and ensuring everything is done correctly.

Discover more on when to hire an accountant.

Plan early, avoid stress

While we’ve highlighted where things often go wrong, it’s worth remembering that millions of people successfully complete their self-assessment each year. With early planning, clear records, and seeking support when needed, most mistakes are completely avoidable.

If you’re self-employed, running a small, limited company, or earning rental income, taking time now to understand your obligations, prepare for key deadlines, and decide whether you need help can make the process far less stressful — and your future self (and bank balance) will thank you.

Get Business Insurance from Protectivity

https://www.gov.uk/government/news/565-million-still-to-file-as-the-self-assessment-deadline-looms
https://www.gov.uk/self-assessment-tax-returns/deadlines
https://www.gov.uk/self-assessment-tax-returns/registering
https://www.gov.uk/log-in-file-self-assessment-tax-return

Protecting your business beyond tax with business insurance

Knowing the self-assessment deadline is important to keep your finances in order, but it’s not the only thing business owners need to think about.

Unexpected events like client disputes, accidents, equipment damage, or other legal issues can all have a financial impact that isn’t covered by good bookkeeping alone.

Protectivity can offer a variety of business insurance policies, helping protect your income, your reputation, and your ability to keep trading if something goes wrong.

Sources:

Last updated by

16:23:22 GMT • 14 January 2026

Tax year dates & deadlines 2026

14 January 2026

•

6 mins read

Contributors

My main focus is managing the blog and product content for the Protectivity website ensuring everything aligns wi...

Running an independent business in the UK means juggling clients, cash flow, compliance and tax deadlines are rarely anyone’s favourite part.

Knowing how the UK tax year works, which deadlines apply to you and how the rules change depending on your business structure can save you unnecessary stress, penalties, and surprise tax bills.

All tax rules are administered by HM Revenue & Customs (HMRC), but how they apply depends very much on how your business is set up and where you’re based.

This guide walks through UK tax year dates for 2026, key deadlines, and what small businesses need to know, whether you’re a sole trader, freelancer, limited company director, or employer.

When does the UK tax year start and end in 2026?

It’s completely normal to feel unsure about when the UK tax year actually starts and ends. It’s one of the most common questions independent business owners ask; especially when planning income, setting aside money for tax, or hearing deadlines talked about in “tax years” rather than calendar dates.

One key thing to know upfront is that the UK tax year doesn’t follow the calendar year, which often catches people out. Instead, it runs on its own timetable that applies across most personal taxes, including Income Tax and National Insurance.

For most individuals and small businesses, the 2026 tax year runs from:

6^th April 2026
5^th April 2027

This applies to:

Sole traders
Self-employed individuals
Company directors (for personal income)
Employees under PAYE

Limited companies, however, usually work to their own accounting periods, which we’ll cover under Corporation Tax.

Key tax dates 2026 at a glance

While exact dates depend on your circumstances, most small businesses will encounter these recurring deadlines:

31^st January – Online Self-Assessment deadline & tax payment
5^th April – End of tax year
6^th April – Start of new tax year
6^th April – New Making Tax Digital (MTD) system is now mandatory
6^th April – VAT changes apply to some goods
31^st July – Second payment on account (if applicable)
31^st October – Paper Self-Assessment return deadline
Monthly or quarterly – PAYE and VAT deadlines
9 months + 1 day after accounting period end (Corporation Tax payment)

Missing deadlines can trigger penalties and interest, so planning them into your calendar early can avoid late payment headaches.

Corporation tax dates for limited companies

Corporation Tax applies to limited companies, not individuals.

How corporation tax works

Companies pay Corporation Tax on profits
Accounting periods usually last 12 months
Corporation Tax is not aligned to the tax year

Key Deadlines

Pay Corporation Tax: 9 months and 1 day after period end
File Company Tax Return: 12 months after period end

Directors must still file personal Self-Assessment returns for salaries and dividends.

Read more on when Corporation Tax is due

VAT returns & deadlines

Most VAT-registered businesses:

Submit quarterly VAT returns
Pay VAT one month and seven days after the end of each VAT quarter

Depending on how your business operates, you may choose alternative options, such as:

Monthly returns, which can help with cash flow if you regularly reclaim VAT
The Annual Accounting Scheme, which spreads VAT payments across the year

Choosing the right scheme can make VAT easier to manage alongside your wider finances.

Making Tax Digital (MTD): What you need to know

Making Tax Digital (MTD) is HMRC’s long-term plan to move tax reporting online, with the aim of making tax reporting more accurate and more up to date. While the changes have been introduced gradually, 6^th April 2026 is an important milestone for many small businesses, particularly sole traders and landlords.

If you’ve heard about MTD but aren’t sure how it affects you, you’re not alone. The rules depend on your business type and income, and not everyone will be affected at the same time.

You can find out more about MTD through official guidance, but the key points are outlined below.

Find out more about MTD deadline.

Policy changes: Dates for small businesses in 2026

Policy and regulatory changes can have a real impact on small businesses, particularly those that employ staff. While not every update will affect every business, staying aware of what’s changing, and when, can help you plan ahead and avoid surprises.

Minimum Wage

Following the Autumn Statement 2025 new rates will be coming into effect from 1st April. For 2026, businesses should expect updates to:

The National Living Wage
Age-based minimum wage rates for younger workers and apprentices

Employment legislation

Alongside wage changes from 1^st April, new employment rights are being introduced.

Not all changes apply immediately or to all businesses, but employers are expected to stay informed and adapt as required. Regularly reviewing contracts, policies, and payroll processes can help ensure you remain compliant as rules develop.

For many small businesses, keeping policies under review and seeking advice where needed is a sensible way to stay on top of changes without added stress.

Common tax mistakes small businesses make

Every year many businesses make the same mistakes misunderstanding exactly what their obligations are to the tax office.

Missing registration deadlines
Confusing tax year with accounting year
Not setting aside money for tax
Ignoring regional tax differences
Leaving compliance until the last minute

Understanding the UK tax year and your obligations doesn’t have to be overwhelming. With good records, forward planning, and awareness of how rules apply to your business type, tax becomes far more manageable.

Tax rules do change, so always check current guidance or seek professional advice if your situation is complex.

Get Business Insurance from Protectivity

https://www.gov.uk/self-assessment-tax-returns/deadlines
https://www.gov.uk/government/collections/making-tax-digital-for-income-tax
https://www.fsb.org.uk/resources/article/key-dates-for-small-business-owners

Protecting your business beyond tax: Why business insurance matters

Staying on top of tax deadlines is one part of running a healthy business, but it’s not the only risk worth planning for.

Unexpected events like client disputes, accidents, equipment damage, or other legal issues can all have a financial impact that isn’t covered by good bookkeeping alone. This is where business insurance plays an important role, helping protect your income, your reputation, and your ability to keep trading if something goes wrong.

Protectivity provides public liability insurance for those self-employed, sole traders, freelancers, or running a limited company. Having the right cover in place can provide additional support alongside your tax compliance, especially as your business grows or takes on new responsibilities.

Explore our business policies today!

Sources:

Last updated by

09:39:54 GMT • 14 January 2026

7 Service Side Hustles to Start in 2026

9 January 2026

•

7 mins read

Contributors

My main focus is managing the blog and product content for the Protectivity website ensuring everything aligns wi...

Safer, demand-led ideas to maximise flexibility and earnings

Starting a side hustle in 2026 doesn’t have to mean chasing the latest trend or gambling on unproven ideas. Service-based side hustles remain one of the most reliable ways to generate extra income, particularly when demand data and sales volume indicate consistent, long-term need.

Based on our business insurance sales data; these are the services we’ve found to be most in demand. It focuses on service side hustles that can work around a day job, generate income quickly, and offer clear growth potential into a small business. Each idea listed shows strong demand signals and avoids the common pitfalls of oversaturated or overly complex ventures.

For those who want flexible extra income or a realistic route to self-employment, these are some of the safest bets heading into 2026.

How these side hustles were selected

Each activity meets several key criteria:

Proven increased demand shown through year-on-year sales growth
Ability to start part-time with minimal upfront investment
Flexibility to work evenings, weekends, or remotely
Clear pathways to higher earnings through scaling or specialisation
Resilience during economic uncertainty

1. Cleaning (Domestic & Commercial)

Cleaning remains one of the most in-demand service businesses due to its essential nature and recurring need.

Ongoing labour shortages and rising hiring costs are pushing demand toward self-employed and flexible cleaning services, creating strong opportunities for independent operators and those seeking additional income.

Typical earnings

Domestic cleaning: £15–£25 per hour
Commercial cleaning: £25–£45 per hour
Monthly side-hustle income: £800–£2,000+

Working around a day job

Early mornings, evenings, or weekends
Regular weekly clients reduce admin and sales time
Jobs can be batched into set days

Growth potential

Hire subcontractors or employees
Focus on higher-value services (offices, end-of-tenancy, Airbnb)
Move toward long-term contracts and predictable cash flow

Why it’s a safer bet: Cleaning demand remains stable regardless of economic cycles, making it one of the lowest-risk service businesses to start.

→ Learn more in our guide how to start a cleaning business

2. Personal Training

Personal training continues to grow as health, fitness, and longevity remain top priorities.

AI-powered coaching tools, wearable data, and online platforms are enabling trainers to deliver remote, hybrid, and personalised training at scale, expanding reach beyond in-person sessions.

Typical earnings

In-person sessions: £30–£60 per hour
Online coaching: £100–£300 per client per month

Working around a day job

Early mornings and evenings suit client availability
Weekend group sessions increase hourly earnings

Growth potential

Online programmes and coaching
Group training or bootcamps
Digital products and memberships

Consideration: Higher regulation than some activities, with certification is required.

3. Dog Walking

Dog walking is a highly local, referral-driven side hustle with strong recurring demand.

Typical earnings

£12–£20 per dog per walk
£20–£40 per hour with group walks
Read our guide on dog walker earnings to find out more.

Working around a day job

Strong lunchtime demand
Ideal for remote or hybrid workers

Growth potential

Pack walks
Hiring additional walkers
Adding pet sitting or boarding services

Why it works: Rising pet ownership and busy lifestyles keep demand consistently high.

4. Pet Sitting

Pet sitting benefits from premium pricing and repeat bookings, particularly during holidays.

Typical earnings

£25–£60 per night
Higher rates for in-home or specialist care

Working around a day job

Mostly passive during work hours
Well-suited to home-based or remote workers

Growth potential

Specialise in senior or medical-needs pets
Repeat holiday clients
Transition into boarding or a full pet-care business

5. Selling Handmade Jewellery

Handmade jewellery combines creativity with strong demand for personalised and ethical products.

Typical earnings

£10–£50+ per item
Higher margins through batching and branding

Working around a day job

Fully flexible production schedule
Sales can be automated through online platforms

Growth potential

Brand building and loyal audiences
Wholesale or collaborations
Limited-edition collections

Demand insight: Consumers continue to favour unique, story-driven products over mass-produced items.

6. Selling Handmade Textiles

Textiles and yarn appeal to a niche but loyal market willing to pay for quality and craftsmanship.

Social commerce – particularly TikTok-driven trends such as crochet, knitting, and upcycling are fuelling renewed interest among younger audiences, while platforms like Etsy and Instagram enable makers to reach global buyers directly.

Typical earnings

£15–£40 per product
Premium pricing for niche materials or techniques

Working around a day job

Ideal for evening or weekend production
Pre-orders help manage time and inventory

Growth potential

Workshops, tutorials, or patterns
Subscription boxes
Collaborations with designers or brands

→ Learn more in our guide on starting a craft business

7. Counselling

Counselling offers stable, recurring income and long-term demand growth.

Therapy usage continues to rise, with a significant proportion of adults accessing counselling, while strong preference remains for qualified human therapists over AI-based alternatives, which can reinforce trust, credibility, and the value of professional services.

Typical earnings

£40–£80 per session
Predictable weekly income

Working around a day job

Evening and weekend sessions
Online counselling removes location limits

Growth potential

Specialisation in niche areas
Group therapy or workshops
Corporate wellbeing contracts

Important: Formal qualifications are required, but this creates high trust and strong long-term earning potential.

→ Learn more in our guide how to start a counselling business

Side hustle comparison table

Side Hustle	Typical Hourly / Unit Earnings	Flexibility Around Day Job	Startup Cost	Speed to First Income	Long-Term Growth Potential
Cleaning	£15–£45/hr	High	Low	Fast	Very High
Personal Training	£30–£60/hr	Medium–High	Medium	Medium	High
Dog Walking	£12–£40/hr	Medium	Low	Fast	Medium–High
Pet Sitting	£25–£60/night	High	Low	Fast	Medium–High
Handmade Jewellery	£10–£50/item	Very High	Low–Medium	Medium	High
Textiles & Yarn	£15–£40/item	Very High	Low–Medium	Medium	Medium–High
Counselling	£40–£80/session	Medium	Medium–High	Slower	Very High

How to choose the right side hustle for you

Ask yourself:

Do you want quick cash flow or long-term scaling?
Do you prefer people-facing or solo work?
How many hours per week can you realistically commit?
Are you aiming to replace your income or simply supplement it?

The best side hustle is often the one you can start consistently, not the one with the highest theoretical earnings.

Why these side hustles make sense for 2026

Service-based side hustles remain one of the most reliable paths to extra income and business ownership. Backed by demand data and sales volume, these ideas reduce guesswork and offer flexibility, resilience, and scalability.

For anyone balancing a day job, or planning a gradual transition into self-employment, these seven options represent some of the safest and most practical opportunities heading into 2026.

Get Business Insurance from Protectivity

https://www.intercleanshow.com/news/innovation/cleaning-trends-spotlight-on-the-uk

Starting a side hustle? Protect yourself with business insurance

Protectivity offers affordable business insurance suitable for side-hustlers and budding entrepreneurs just like you, specialising in a wide range of different activities. Public liability is included with options to add extras such as equipment cover, employers’ liability and other specific industry add-ons.

Whether you’re looking for pet care business insurance, personal trainer insurance, catering insurance, crafters insurance, or another small business, explore the full list of business insurance we provide today – or get in touch with our team to discuss your specific requirements.

Sources:

https://www.sovereignmagazine.com/business-savvy/rise-of-the-fitness-microbusiness-how-uk-personal-trainers-hack-growth-in-2025/

https://www.cmtia.co.uk/craft-industry-trends-for-2025-whats-hot-in-handmade-markets/

https://www.bacp.co.uk/about-us/about-bacp/bacp-public-perceptions-survey/

Last updated by

10:18:54 GMT • 8 January 2026

When is Corporation Tax Due?

7 January 2026

•

8 mins read

Contributors

My main focus is managing the blog and product content for the Protectivity website ensuring everything aligns wi...

Understanding when corporation tax is due is one of the most common pain points for UK company directors, particularly for new and growing businesses.

Whilst running your own business gives you flexibility and control it also means staying on top of responsibilities that don’t come with reminders or safety nets. Miss a deadline, and you could face interest charges, penalties, and unnecessary stress.

Many UK directors assume corporation tax works like self-assessment — but it doesn’t. Some of the most common misconceptions include:

“Corporation tax is paid when I file my accounts”
“My accountant automatically pays it for me”
“The tax due date for corporations is the same for everyone”

In reality, corporation tax due dates depend on your accounting period, and payment is often due before your corporate tax return is filed.

For UK limited companies, corporation tax deadlines are fixed and enforced. Understanding them early helps businesses plan cash flow, avoid penalties, and stay focused on growth rather than firefighting.

This guide clears up exactly when is corporation tax due, who needs to pay it, and how to stay compliant in 2026 and beyond.

What is Corporation Tax?

Corporation tax is a tax on the profits of UK limited companies and certain organisations. It is paid to HM Revenue & Customs (HMRC).

Corporation tax is charged on:

Trading profits
Investment income
Chargeable gains (for example, selling assets)

It is different from:

Income tax, which applies to sole traders and individuals
VAT, which is charged on sales rather than profits

Who needs to pay Corporation Tax?

Once you operate through a limited company, corporation tax becomes part of your regular obligations. You must pay corporation tax if you operate as:

A UK limited company
A foreign company with a UK branch or office
A club, association, or charity with taxable profits

You do not pay corporation tax if you are:

A sole trader
In a partnership (partners pay income tax instead)

If you’re starting out or becoming a limited company, you’ll need to register with Companies House. Many companies get caught out when their corporation tax obligations are new or changing.

When is Corporation Tax Due in the UK?

One of the most searched questions by UK directors is “when is corporation tax due?” and the answer depends on two separate deadlines.

Understanding your accounting period

Your accounting period is usually:

12 months long
Often aligned with your company’s year end
It can be shorter in your first year

Your corporation tax due date is calculated from the end of this period, not the calendar year.

Corporation Tax Payment Deadline (2026)

For most UK limited companies:

Corporation tax is due 9 months and 1 day after the end of your accounting period.

Example:

Accounting year end: 31^st March 2025
Corporation tax due date: 1^st January 2026

This is the tax due date for corporations, regardless of when accounts are filed. You must pay the tax before or by this date, not when you submit your return.

When is the corporate tax return due?

Another common question is “when is corporate tax return due?”

Your corporation tax return (CT600) must be filed:

12 months after the end of your accounting period

Example:

Accounting year end: 31^st March 2025
Corporate tax return due: 31^st March 2026

This means:

Payment comes first
Filing comes later

Understanding this separation is critical to avoiding penalties.

Summary of corporation tax due dates

To clarify the due dates for corporation tax, here’s a simple breakdown:

Corporation tax payment due:
9 months and 1 day after your accounting period ends
Corporation tax return due date:
12 months after your accounting period ends

These are the key corporation tax due dates most small businesses need to know.

How to calculate corporation tax

Corporation tax is calculated on your taxable profits. In the UK for company profits over £50,000 the rate is 25%. For under £50,000 the rate is 19%.*

The basic steps are:

Start with your company’s profit
Depending on your profit, check what rate you’ll pay
Deduct allowable business expenses
Adjust for capital allowances and disallowed costs
Apply the correct corporation tax rate

As businesses grow, corporation tax often increases unexpectedly due to:

Higher profits
Reduced reliefs
Changes in applicable tax bands

This is why forecasting becomes increasingly important.

How to pay corporation tax

Corporation tax must be paid electronically. You’ll need a Government Gateway account to pay online.

Accepted methods include:

Online banking
Telephone banking
CHAPS or BACS payments

You’ll need:

Your 17-character corporation tax payment reference
To allow enough time for funds to clear

Paying a few days early helps avoid late payment interest due to bank delays.

Common corporation tax mistakes to avoid

Understanding when corporation tax is due is the single biggest factor in avoiding these mistakes. Many penalties arise from avoidable errors, including:

Missing the payment deadline but filing on time
Assuming an accountant pays the tax automatically
Forgetting corporation tax after a profitable year
Poor bookkeeping throughout the year
Confusing the return due date with the payment due date

What happens if you miss the corporation tax due date?

If you miss the tax due date for corporations:

Interest is charged on late payments
Penalties may apply for late filing
Repeated issues can trigger increased scrutiny from HMRC

Even a short delay can result in unnecessary costs. Find out more about what happens if you miss a tax payment deadline here.

How corporation tax changes as your business grows

Growth is usually the goal for independent businesses — but as profits increase, the way corporation tax applies to your company can change in ways that aren’t always obvious at first.

What starts as a relatively straightforward annual tax bill can quickly become more complex as profit levels rise. This is because corporation tax in the UK isn’t just about how much you earn, but where your profits sit within specific thresholds and rules.

As your business scales, your corporation tax obligations may change in the following ways:

Changes to corporation tax rates

The rate of corporation tax you pay depends on your level of taxable profit:

19% on profits of up to £50,000
Up to 25% on profits between £50,000 and £250,000, with marginal relief applying
Profits above £250,000 are taxed at the full 25% rate

For growing businesses, this can mean that a relatively small increase in profit leads to a larger-than-expected increase in the tax bill.

Changes to how and when you pay

As profits increase, the way corporation tax is paid can also change:

Companies with profits up to £1.5 million typically pay corporation tax as a single lump sum
Companies with profits over £1.5 million may be required to make quarterly instalment payments, spreading payments across the year

This shift can significantly affect cash flow if you’re not prepared for it.

When should you get professional help?

Getting professional advice isn’t a sign that things are getting complicated for the wrong reasons. In many cases, it’s simply a response to success, change, or uncertainty and a way to stay ahead rather than catch up.

You should consider professional advice if:

Your profits are increasing year-on-year
Rising profits can push your business into different tax bands, change how much tax you owe, and affect when you need to pay it. Advice at this stage helps you plan rather than react.

You’re paying more tax than expected
A larger bill isn’t always wrong, but it’s often a sign that there may be opportunities to plan better, budget earlier, or review how profits are structured.

You’ve recently incorporated or expanded
Moving to a limited company, hiring staff, investing in assets, or entering new markets all change your tax position and responsibilities.

Early advice often prevents costly mistakes later. If you’re considering getting some help decide with our blog on if you should hire an accountant.

Staying ahead of corporation tax deadlines

Understanding when corporation tax is due, knowing your corporation tax due date, and separating payment deadlines from return deadlines is essential for every UK company director.

For growing businesses, staying ahead of corporation tax isn’t just about compliance, it’s about protecting cash flow and planning confidently for the future.

Get Business Insurance from Protectivity

https://www.gov.uk/corporation-tax-rates

Beyond tax: Protect your company with business insurance

Protectivity offers affordable business insurance for independent business owners just like you, specialising in a wide range of different activities. Public liability is included with options to add extras such as equipment cover, employers’ liability and other specific industry add-ons.

Whether you’re looking for specialist trades cover, pet care business insurance, catering insurance, crafters insurance, or another small business, find out about all the business activities we can cover.

You can also get in touch with our team to discuss your specific requirements.

Sources:

https://www.gov.uk/corporation-tax

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