FAQs
Getting Started & What We Offer
01. How can Apex Flow Accountancy offer expert services from just £9 a month?
02. Do I get a real, qualified UK accountant, or is it just software?
03. What's the real value of the Free Business Website & CRM included in your packages?
04. How easy is it to switch my existing accountant to Apex Flow Accountancy?
05. Which package is right for my specific business type (Sole Trader, LTD, or LLP)?
06. What is the typical onboarding process when I join Apex Flow?
07. What payment methods does Apex Flow Accountancy accept for subscriptions?
08. What is Apex Flow Accountancy's refund and cancellation policy?
09. How do I register as a sole trader with HMRC in 2025?
You can register online via HMRC’s Government Gateway service. You’ll need your National Insurance number, business name (if using one), and start date. For the 2025/26 tax year, register by 5 October 2025 if you started trading in 2024/25. Missing this deadline may result in penalties.
10. What’s the difference between being a sole trader and a limited company in the UK?
A sole trader is personally responsible for all business debts and keeps all profits after tax. A limited company is a separate legal entity, offering limited liability but requiring more compliance. Many freelancers start as sole traders for simplicity, then incorporate when income or liability risk grows.
11. Do I need a business bank account as a sole trader?
Legally, you don’t need a separate account as a sole trader, but it’s highly recommended. Keeping personal and business transactions separate makes bookkeeping easier and avoids errors in your Self Assessment. Some banks offer 12-month free business accounts for new sole traders.
12. 5. Do I need to register for VAT immediately?
You must register for VAT if your rolling 12-month taxable turnover exceeds £90,000 (2025 threshold). You can also register voluntarily if your clients are VAT-registered, which may allow you to reclaim VAT on purchases. Voluntary registration can help your business appear more established.
13. What records should I keep as a new sole trader?
Keep all invoices, receipts, bank statements, and mileage logs. HMRC requires you to keep records for at least 5 years after the 31 January deadline of the relevant tax year. Digital records are fine if they are accurate, complete, and readable.
14. When will I first need to file a Self Assessment tax return?
If you start in the 2024/25 tax year, your first return is due by 31 January 2026 (online filing). Payment for any tax owed is also due on that date, plus your first payment on account for 2025/26 if applicable.
15. Can I start freelancing while still employed?
You’ll continue paying PAYE on your employment income, and you must register as self-employed for any freelance work and complete a Self Assessment. HMRC will combine both income streams to calculate your total tax and National Insurance. This applies to UK citizens and those under a valid Skilled Worker (Tier 2) visa. However, on that visa you may only undertake such supplementary self-employment for up to 20 hours per week, and it must be in the same occupation or professional level as your main sponsored job, per UKVI rules. If you hold a work visa, seek professional immigration advice before starting self-employment to ensure full compliance.
Optimising Your Business & Growth
01. What allowable expenses can UK sole traders claim to reduce tax?
02. Can I claim home office expenses as a UK sole trader in 2025/26?
03. What are the MTD for ITSA compliance requirements for sole traders from 2026?oduct?
04. How do I choose MTD-compatible software for my sole trader business?
05. What are the pros and cons of voluntary VAT registration for a small business?
06. Can I claim tax relief on pension contributions as a self-employed individual?
07. What are the best tax-saving tips for UK freelancers in 2025/26?
08. What triggers an HMRC tax investigation for a UK sole trader?
09. When is the Self Assessment deadline for the 2024/25 tax year?
The online Self Assessment filing deadline is 31 January 2026. Paper returns are due by 31 October 2025. Late filing triggers an automatic £100 penalty, with additional charges after 3, 6, and 12 months. File early to avoid last-minute issues with HMRC systems.
10. What are the penalties for missing a tax return deadline?
Missing the deadline incurs a £100 fixed penalty, even if no tax is due. After 3 months, daily penalties of £10 apply (up to £900). At 6 months, there’s a further 5% of the tax due or £300 (whichever is greater). HMRC may reduce fines if you have a reasonable excuse.
11. What is MTD for ITSA and who must follow it?
Making Tax Digital for Income Tax Self Assessment applies from April 2026 for self-employed individuals and landlords earning over £50,000/year, and from April 2027 for those earning over £30,000/year. It requires digital record-keeping and quarterly updates to HMRC via approved software.
12. Do I need accounting software to comply with MTD for ITSA?
Yes, if you meet the MTD income thresholds. Approved options include Xero, FreeAgent, and QuickBooks. HMRC provides a list of recognised software. Using compliant software helps avoid submission errors and keeps you audit-ready.
13. What is the VAT registration threshold for 2025?
The compulsory registration threshold is £90,000 taxable turnover in any rolling 12-month period. You must notify HMRC within 30 days of crossing the threshold. Failure to register on time may result in back-dated VAT charges and penalties.
14. Do sole traders need to pay National Insurance?
Yes. If profits exceed £12,570/year, you pay Class 2 (£3.45/week) and Class 4 (9% on profits between £12,570 and £50,270, 2% above that). Rates are set by HMRC annually. These contributions count towards your State Pension and certain benefits.
15. How do I respond to an HMRC investigation?
Act promptly. Gather all requested records (invoices, receipts, bank statements) and reply by the stated deadline. You may wish to appoint a qualified accountant to liaise with HMRC on your behalf. Cooperation can reduce penalties if errors are found.
16. Can I switch accountants mid-tax year?
Yes. You can change at any time. Your new accountant will request a professional clearance letter and necessary records from your previous accountant. Ensure no deadlines are missed during the transition to avoid penalties or compliance gaps.
Money-Saving & Growth Tips
01. How can I reduce my tax bill as a freelancer?
Keep detailed records of all business expenses, use available tax reliefs (like the Annual Investment Allowance), and make pension contributions. Filing your Self Assessment early gives time to plan and save. Seek advice from a qualified accountant to maximise deductions legally.
02. Can I use the trading allowance to save tax?
Yes. If your total self-employed income is under £1,000/year, you don’t need to register for Self Assessment or pay tax. If your income is higher, you can deduct this allowance from your turnover instead of claiming actual expenses — whichever saves you more.
03. How does using a pension save me tax?
Pension contributions get tax relief at your marginal rate. For example, if you pay £100 into a pension, the government adds £25 if you’re a basic-rate taxpayer. Higher-rate taxpayers can claim extra relief via their Self Assessment. This reduces taxable income and builds long-term savings.
04. What’s the benefit of cash basis accounting for small businesses?
Cash basis means you only pay tax on income received and claim expenses when paid. It’s simpler and improves cash flow for businesses earning under £150,000/year. However, it may not suit if you have large stock or need detailed accounts for finance applications.
05. How can I plan for tax payments to avoid cash flow issues?
Set aside a fixed percentage (typically 20–30%) of each payment you receive into a separate account for tax and National Insurance. Filing early lets you confirm the exact amount owed, helping you avoid last-minute payment stress.
06. How do I grow my business as a freelancer or sole trader?
Focus on consistent marketing, building client relationships, and investing in tools that save time (like cloud accounting software). Review your pricing regularly and explore new income streams. A qualified accountant can help with growth planning and tax efficiency strategies.