Xero Makes Accounting Simple for Small Business Owners

As a small business, you haven’t got hours to spend on admin. You need accounting software that’s quick to learn and quicker to use. Xero is simple to navigate and clearly structured, so you’re never hunting for the page you need.

But simplicity isn’t only about finding your way around. It’s about how much of the work Xero does for you. From connecting the apps you already use to giving you real-time figures, below are five features that will save you the most time.

Xero Connects Seamlessly With Popular Systems & Apps

HubSpot, Breathe, BrightPay: these are just three examples of third-party apps that integrate with Xero, and there are many more. With the Xero app store you can choose from a wide range of apps, find out how the app works, and read reviews from verified Xero users. This makes it easier for you to connect with the tools you’re already using, helping to keep everything together, providing a more informed view of your business. 

Automation Saves Time and Reduces Admin

Xero’s automation features are perfect for reducing the need to perform repetitive jobs. From automatically importing bank transactions to matching payments and sending invoice reminders, Xero allows you to spend more time on the stuff that really matters. 

Real-Time Insights Help You Stay in Control

Running a business means making financial decisions all the time, so having confidence in knowing your financial data is accurate is absolutely essential. As Xero is a cloud based accounting software, your financial information is available online, meaning you can check on your business wherever you are. From monitoring income and expenses to keeping an eye on cash flow, having this information easily accessible gives you the assurance you need when making decisions. 

Simple Invoicing and Payments

Creating and sending invoices does not need to be another time consuming task that you put off until the last minute. With Xero the process can be made simple by allowing you to create professional invoices, send them to customers, and keep track of whether they have been paid, are outstanding or are overdue. You can also set up invoice reminders which takes away some of the awkwardness of chasing up customers for payment.

Easy financial Reporting

Financial reports can sound really complicated, but they do not have to be. Xero provides clear reports on income, expenses, profit and cash flow, making it easier for small business owners to understand their finances without needing to be an accounting expert. Having all this information in one place also makes it easier to see how your business is performing, and spot areas that may need attention. 

360 Accountants Provide Expert Support as a Xero Partner

Choosing accounting software can be difficult enough, but knowing how to use it properly, especially as a beginner, can be a whole other story. But you don’t have to do it alone. At 360 Accountants we have been providing Xero accounting support since 2010, and we offer:

• Bespoke training built around your business
• Free tips and tutorials on our YouTube channel
• Flexible support (as much or as little as you need)
• Fixed fee pricing with no surprises
• A dedicated contact who knows your accounts
• Access to our support line – xero@360accountants.co.uk

Get in touch now to make managing your finances much more straightforward, giving you more time to focus on running and growing your business. 

The post Why Small Businesses Choose Xero Accounting Software appeared first on 360 Chartered Accountants.

The Chancellor has said the Budget will stick to the government’s borrowing rules, but money is tight. That usually means some tax rises, along with help in the areas the government thinks will get the economy growing.

There’s already plenty of guesswork in the press, so we asked our team what they actually expect to see (and what they’d like to see), based on the conversations we’re having with business owners, employers and individuals every day.

Autumn Budget 2026 at a Glance

• Date: Wednesday 28 October 2026, usually starting at around 12:30pm after Prime Minister’s Questions.
• Chancellor: John Healey, delivering his first Budget.
• Ruled out: no increase to the rates of income tax, employee NI or VAT. (Labour committed to not increasing taxes for ‘workers’. Unfortunately, it seems business owners and landlords are not considered to fall into this category.)
• Our predictions: VAT threshold changes rather than a VAT rise, an Employers NI cut for under 25s, a bigger Employment Allowance for small businesses, more changes to business rates and working from home tax relief back on the table.

When is the Autumn Budget 2026?

The Autumn Budget 2026 is on Wednesday 28 October 2026. The Chancellor usually starts speaking at around 12:30pm, straight after Prime Minister’s Questions, and the speech normally lasts about an hour. The Office for Budget Responsibility (OBR) also publishes its latest forecasts for the economy on the same day.

It’s worth remembering that a lot of the important detail isn’t in the speech itself. It’s in the documents HMRC and the Treasury publish straight afterwards, which explain when changes start and who they affect. We’ll be going through these live on the day and sharing what it all means on our Budget Hub.

Who is Delivering the Autumn Budget 2026?

John Healey, who became Chancellor on 20 July 2026 after Andy Burnham took over as Prime Minister. He was previously Defence Secretary and worked at the Treasury as a junior minister between 2002 and 2007. This will be his first Budget.

What’s Expected in the Autumn Budget 2026?

Most experts expect some tax rises, but not to the rates of income tax, employee NI or VAT. The Prime Minister has said the government will stick to its manifesto promise not to raise these, so any extra money is likely to come from elsewhere, for example by freezing tax thresholds, changing allowances and reliefs or increasing business taxes.

The government doesn’t have much room to manoeuvre. Higher borrowing costs, rising energy prices linked to the conflict in the Middle East and more spending on defence have all eaten into the spare money the Chancellor was expecting to have. Some estimates put it as low as £5 billion, others nearer £10 billion.

The new government has also said it wants to move money and decision making out of Westminster and into the regions, and ease the pressure on household budgets. Paying for all of that without borrowing more is the big challenge.

In short, with the big three taxes off the table, we expect the changes to be in the detail. And that’s often where the biggest impact on your tax bill is.

Our Autumn Budget 2026 Predictions

1. VAT Stays at 20%, But the Threshold Could Change

We’re hoping the rumours of a VAT rise are wrong. The Prime Minister has said VAT won’t go up and we hope that holds, because a higher rate would be disastrous for hospitality, leisure and retail businesses that are already struggling with higher staff costs and customers watching what they spend.

If the Chancellor does need to raise more from VAT, we’d rather see the registration threshold drop to around £30K than see the rate go up. The threshold is currently £90K, which is high compared with a lot of other countries, and we know plenty of businesses keep their turnover just under it to avoid registering.

If the threshold did drop to £30K, a lot of sole traders and small businesses would need to register for VAT, either add it to their prices or absorb the cost, and keep digital records under Making Tax Digital.

If your turnover is between £30K and £90K, it’s worth understanding now how registering would affect your prices and cash flow, and whether a scheme like the Flat Rate Scheme could help. Our VAT team can work through the numbers with you.

2. A Cut to Employers NI for Younger Workers

We’d like to see a cut in Employers NI for younger employees to help bring youth unemployment down.

At the moment, employers pay 15% NI on earnings over £5,000 a year. You don’t pay any Employers NI for staff under 21 or apprentices under 25 (on earnings up to £50,270), but as soon as a non-apprentice turns 21 the full 15% kicks in.

More than one million 16 to 24 year olds are currently not in education, employment or training. In July, MPs on the Work and Pensions Committee recommended extending the 0% rate to everyone under 25, saying the current costs (NI and wages) are putting employers off hiring for entry level jobs, especially in retail and hospitality.

To put some numbers on it, a full-time employee aged 21 to 24 on the National Living Wage (£12.71 an hour) costs their employer around £2,970 a year in Employers NI. Extending the under 21 rule to under 25s would save you that for each one.

If you’re planning to take someone on, it’s worth checking whether an apprenticeship could already save you the NI. Our payroll team can also make sure every employee is on the right NI category.

3. A Bigger Employment Allowance for Small Businesses

We’d like to see the £10,500 Employment Allowance increased for small businesses, with it reduced or scrapped for larger businesses to pay for it.

The Employment Allowance lets eligible employers knock up to £10,500 a year off their Employers NI bill. Since April 2025, businesses of any size can claim it (it used to be limited to employers with an NI bill under £100,000).

Small businesses have felt the rise in Employers NI, the lower threshold and higher wages far more than big ones. A bigger allowance would be one of the simplest ways to help them keep their staff and take on new people.

As a rough guide, £10,500 covers the Employers NI on three or four full-time staff aged 21 or over on the National Living Wage.

Make sure you’re actually claiming it. It isn’t automatic, so you’ll need to claim it through your payroll software each tax year. If the only employee paid above the threshold is a director, the company can’t claim. There are also restrictions for businesses who sell to the public sector.

4. More Changes to Business Rates

Our view is that business rates should be scrapped altogether and replaced with a system based on profit rather than property. Realistically, we don’t expect that on 28 October, but we do expect more tweaks.

Business rates are based on the value of the building you trade from, not how much money you make. That means a struggling shop on the high street can end up with a big bill, while an online business working out of a warehouse pays a lot less in comparison. The system is also complicated and expensive to run, with revaluations, appeals, lots of different reliefs and now five different multipliers.

Business rates already changed in April 2026. Retail, hospitality and leisure properties now pay lower rates, while properties with a rateable value of £500,000 or more pay a higher rate of 50.8p in the pound. Pubs, social clubs and live music venues in England will also get a further 20% off from April 2027. These changes are welcome, but they add more complexity rather than fixing the problem.

Getting rid of business rates completely is unlikely any time soon. They bring in a lot of money for the government, and one of the obvious ways to replace it (putting up Corporation Tax) is off the table, as the main rate has been capped at 25% for this Parliament. What’s more likely is further changes to reliefs and rates, and possibly local councils getting more say over how business rates work in their area.

In the meantime, check your 2026 rateable value is correct, that you’re on the right multiplier and that you’re getting all the reliefs you’re entitled to. Mistakes are more common than you’d think.

5. Will Working From Home Tax Relief Come Back?

We wouldn’t be surprised if the Budget looked again at tax relief for working from home.

From 6 April 2026, employees can no longer claim tax relief from HMRC for the extra household costs of working from home if their employer doesn’t pay them for it. The flat rate was £6 a week (£312 a year), worth around £62 a year to a basic rate taxpayer and £124 to a higher rate taxpayer.

The government scrapped it because more than half of the claims HMRC checked weren’t eligible. But it doesn’t sit well with the government’s push for more flexible working, and it doesn’t save much money either. The Treasury expects to save around £10 million in 2026/27, rising to around £30 million a year, so a tighter version for people who genuinely have to work from home would be cheap to bring back.

In the meantime, employers can still pay staff up to £6 a week towards working from home costs tax and NI free, so it’s worth asking your employer. Company directors can still claim home office costs through their company. And if you were eligible in previous years but never claimed, you may be able to backdate a claim for up to four years.

What’s Already Been Announced?

A few changes have already been confirmed, and some from previous Budgets are still on their way:

• VAT on electricity: VAT is being removed from household electricity bills from 1 October 2026.
• Pubs and venues: 20% off business rates for pubs, social clubs and live music venues in England from April 2027.
• Frozen thresholds: the Personal Allowance (£12,570) and the Employers NI threshold (£5,000) are frozen until April 2031, so more people pay more tax as wages go up.
• Cash ISAs: the Cash ISA limit is due to drop to £12,000 for savers under 65, as announced in the 2025 Budget.
• Student loans: the Plan 2 repayment threshold is frozen at £29,835 from April 2026 to April 2030.
• Making Tax Digital for Income Tax: now in place for sole traders and landlords with income over £50K, dropping to £30K from April 2027. Find out if you need to comply with Making Tax Digital.

Any of these could change on Budget day, so keep an eye on our Budget Hub.

What Should You Do Before the Budget?

Our advice is not to make any big decisions based on rumours. But the next few weeks are a good time to get organised, so you can act quickly once the details are confirmed. Some Budget changes start straight away, some from the next tax year and some years down the line.

Before 28 October:

• Business owners: review how you’re paying yourself this year (salary, dividends and pension contributions) and think about whether any big purchases, like equipment or vehicles, should happen before or after the Budget.
• Employers: check you’re claiming the Employment Allowance, make sure younger staff and apprentices are on the right NI category, and review your working from home policy.
• Businesses close to the VAT threshold: work out what registering would mean for your prices and admin.
• Retail, hospitality and leisure businesses: check your rateable value and that you’re getting every relief you’re entitled to.
• Individuals: make the most of this year’s allowances, like your ISA and pension, and speak to your accountant before selling assets or making gifts based on speculation.
• Everyone: book in a catch up with your accountant after the Budget to find out exactly how it affects you.

This blog is general information rather than personal advice, so please speak to us before making any decisions.

Autumn Budget 2026 FAQs

When is the Autumn Budget 2026?

The Autumn Budget 2026 is on Wednesday 28 October 2026. Chancellor John Healey will deliver it in the House of Commons, and the Office for Budget Responsibility will publish its economic and fiscal forecasts on the same day.

What Time Does the Autumn Budget Start?

The Budget speech usually starts at around 12:30pm, straight after Prime Minister’s Questions, and typically lasts about an hour. The full Budget documents are published online as soon as the Chancellor sits down.

What’s Expected in the Autumn Budget 2026?

Most experts expect some tax rises, but not to the rates of income tax, employee NI or VAT, which have been ruled out. Areas to watch include tax thresholds, investment and property taxes, business rates, Employers NI and support for regional growth and the cost of living.

Will VAT Go Up in the Autumn Budget 2026?

A rise in the main VAT rate is unlikely. The Prime Minister has said the government will keep its manifesto promise not to raise VAT. However, other changes to VAT, such as a change to the £90,000 registration threshold or new reduced rates, haven’t been ruled out.

Will Employers NI Change in the 2026 Budget?

Employers NI is currently 15% on earnings above £5,000. There’s growing pressure, including from a committee of MPs, to extend the existing 0% rate for under 21s to all employees under 25. We think a cut for younger workers is one of the more likely changes.

Is Working From Home Tax Relief Coming Back?

It was scrapped for employees from 6 April 2026 and there’s no confirmed plan to bring it back. We think it could be looked at again because it raised so little. In the meantime, employers can still pay up to £6 a week tax free towards working from home costs.

Who is Delivering the Autumn Budget 2026?

Chancellor of the Exchequer John Healey, who was appointed in July 2026. It’s his first Budget and the first under Prime Minister Andy Burnham.

When Do Budget Changes Come Into Effect?

It depends on the change. Some start immediately on Budget day, many start from the next tax year on 6 April 2027, and others are brought in over several years. The Budget documents confirm the start date for each one.

Get Ready for the Budget With 360

Whatever the Chancellor announces, the most important thing is what it means for you. Our team will be covering the announcements live on the day on our Budget Hub, YouTube and social channels.

For the first time this year, we are offering a personalised Autumn Budget Report Service to clients. This will include a detailed, personalised report including the cost implications for your business of any National Minimum Wage, Employers NI or tax increases, as well as an analysis of the impact to you personally and suggested actions to mitigate any increases. Please get in touch for more information on this service.

For a free, no obligation initial meeting (either in person or online), please contact us on help@360accountants.co.uk or 01482 427360, or make an enquiry online.

The post Autumn Budget 2026 Predictions: What Our Accountants Expect appeared first on 360 Chartered Accountants.

Although growth is to benefit a business (and sometimes the owners), it can be dangerous and cause heavy drain on cash flow, or stretch employees past their limits creating low morale.

That’s why assessing your performance is essential to making sure that it is moving in the right direction, and you are prepared for changes that come with growth. It is not just about making sure sales are increasing, but a quality assessment will reveal problems you can prevent, potential challenges to prepare for, and efficient systems that you can optimise.

What Strong Business Performance Really Looks Like

A good mix of qualitative and quantitative goals paves the way for a strong business performance. This is because a healthy business is not just made up of figures and sales, but it also relies on employee morale, customer retention and efficient internal communication channels. A strong business performance also means achieving success across all areas of the business, not just financially.

When assessing performance, businesses should measure a range of key performance indicators, including financial performance, customer performance, operational performance, employee performance, and market performance. Whilst we’re not saying that your net profit margin and revenue growth rate are not important (because they definitely are), it is essential to take into account all areas of the business when assessing business performance to gain a complete understanding of its overall success.

How to Identify the Barriers Holding Back Your Growth

Business growth doesn’t tend to stop suddenly, it is usually a slow decline, which gives you many opportunities to develop and get back on track. To improve your business growth, you have to know what is holding you back and where to adapt. Therefore, we’ve written below 5 common barriers to business growth and how you can overcome them.

Cash Flow Gaps

Business growth often creates cash flow gaps because costs increase before revenue catches up. Upfront expenses such as inventory, equipment, larger premises, and initial marketing campaigns can put pressure on cash flow, even when the business is growing. To prevent cash flow gaps, it is essential to perform detailed cash flow forecasts so you can see problems before they arise. If you have already hit a cash flow problem, reducing costs, negotiating longer payment terms with suppliers and shifting to upfront customer payments are all ways to support you back to business growth.

Not Knowing Your Competitors

As the famous saying goes “keep your friends close, but your enemies closer,” knowing your competitors is essential and can majorly set back business growth if you don’t do your research on them. This is because without knowing your competitors, you could be underpricing or overpricing, missing market shifts or wasting marketing spend on the same audience.

Poor Market Focus

Put yourself in your audience’s shoes, what are they looking for in your product or service? Aiming your product at the wrong people or having incorrect messaging can waste your marketing budget completely. When carrying out your market research, think about your customers’ functional needs, emotional needs, and social needs to give you a strong idea of who your customer is and how you can reach them.

Capacity

Capacity can be a major barrier to growth, whether it is a lack of staff, time, space or equipment. If a business reaches its capacity in one of these areas, it may struggle to keep up with demand, leading to delays, lower quality and potentially losing customers. However, there are ways to prevent capacity issues, such as planning ahead, and considering what you will need as demand increases (more staff or new equipment).

Poor systems and processes

Even processes that have worked for years can become obsolete, so it is critical to make sure that systems are regularly checked and adapted when necessary. If businesses do not keep up to date with streamlined systems it can cause major barriers in growth, as competitors can already be ahead of the game.

The Advantages of Having a Business Growth Strategy

Business growth strategies are essential to keeping your company exciting and up to date, they can include releasing new or improved products, using new technologies, or entering new markets. There are many benefits to business growth including increased profits, diversification, and enhanced reputation. A well planned growth strategy also allows businesses to adapt more confidently to changing market conditions.

Furthermore, it is critical to make sure that all internal stakeholders such as employees and shareholders, are kept informed of changes that are being made, and that they have the correct support to help them adapt. Change management, which relies on strategies like clear communication, structured training, and empathetic leadership is a great way to make sure your employees are eased into business shifts.

Why 360 Accountants’ Management Consultancy Helps You Grow Faster

Business growth can be difficult, but with 360 Accountants’ management consultancy service, driving your business forward can be made easier. Not only have we scaled our own business but we have supported many others across a wide range of industries every step of the way. We offer services such as assessing your budgeting, reviewing your management accounting, and assisting with recruitment of an in house accountant. If your business is in need of stronger financial processes, and coaching to help implement new changes, get in touch with 360 Accountants now, our professional team is more than happy to help.

The post Is Your Business Performance on Track for Growth? appeared first on 360 Chartered Accountants.

MTD Compliant Software

At 360 Chartered Accountants we understand that different businesses have different wants and needs. Sole traders may prioritise simplicity, however landlords will need MTD software that is more property specific. Below are some of the best Making Tax Digital software options available, each with specific features to help different businesses.

FreeAgent

FreeAgent is one of the most popular MTD software choices among freelancers, sole traders and small businesses. This is because of their exceptional support, easy to use features, and AI-powered technology that automatically categorises bank transactions. FreeAgent is also an award winning software, with awards such as Friendliest Software of the Year (Which they have won 6 times), 2024 UK Customer Experience winner and Best Contractor Accounting Software in 2024.

Hammock

For landlords, Hammock is highly recommended because it has specific features made to support landlords with their taxes. For example you can monitor your rental income and expenses in real time, get up to date reports per property, and manage your quarterly submissions, all in one simple application.

QuickBooks

If you are looking for a more comprehensive bookkeeping software, QuickBooks is a great choice. Transactions are imported automatically from your bank, it is HMRC approved for making tax digital, and it is a cloud based software making it accessible from anywhere. If you’re not sure where to start, speak to 360 Accountants, who can help you choose the right QuickBooks plan and get everything set up.

Xero

Xero is trusted by over 4.9 million subscribers worldwide and is fully HMRC recognised, making it a reliable choice for businesses preparing to make tax digital. It is also great for small and larger businesses due to its ability to grow with businesses and offer more advanced features when necessary.

At 360 Accountants we offer bespoke Xero training to help you and your team use the software efficiently, and the training can be delivered in a way that works best for you, whether that is online or in person.

We’ve also got a number of Xero guides available for you to watch over on our YouTube channel. Take a look at this one for example

Or use our Xero helpline to get in touch with a specific query: xero@360accountants.co.uk

Struggling to Decide Between Xero & QuickBooks?

Xero and QuickBooks are incredibly similar tools at face value, with both offering everything you need to stay compliant with Making Tax Digital. To help you make the right choice, we’ve broken down the key differences between Xero and QuickBooks. If you’re still not sure which is best for your business, our team is always happy to offer advice and help you find the option that works best for you.

Is There Free Software for Making Tax Digital?

There are some free MTD softwares available, however for larger and more complex companies paid MTD software is usually necessary. This is due to these businesses needing the extra features such as unlimited users, auto bank reconciliation, and project tracking. These extra features will not be essential for all businesses as the basic tools can be enough, but it is something to take into consideration when choosing your MTD software.

Sage

For non-VAT registered sole traders wanting to simplify manual record keeping, and taxes, Sage can be a great choice as they offer a basic free MTD software. In addition, Sage also offers a paid plan for sole traders, with slightly more advanced features for as little as £0.70 per month.

ClearBooks

ClearBooks also offers a free MTD software plan for sole traders and landlords with very basic needs. Therefore, for self-employed individuals who want to create digital records with ease and need to submit MTD quarterly updates to HMRC, ClearBooks is a strong choice.

Still Finding MTD Confusing?

Making Tax Digital can feel difficult, however with the help of 360 accountants, who have helped hundreds of businesses transition to MTD, you can feel at ease. From choosing the right software and setting it up correctly, to providing training and ongoing support, 360 Accountants have got your back. Get in touch with our expert team today.

The post The Best Making Tax Digital Software appeared first on 360 Chartered Accountants.

In addition, from the 6th of April 2027 the qualifying income threshold will be reduced to £30,000, bringing more self-employed individuals and landlords within the scope of MTD. If you are or will qualify for Making Tax Digital but you need some extra support, get in touch with our team at 360 Accountants. We have helped hundreds of businesses smoothly transition, including many that have chosen to early adopt.

What Making Tax Digital Actually Means

Making Tax Digital (MTD) is HM Revenue and Customs’ (HMRC) move to require businesses to keep digital records and submit tax information through approved software to improve accuracy and efficiency. MTD will not only modernise the UK tax system but it will lower the likelihood of mistakes when people submit their tax returns.

Under Making Tax Digital, businesses are required to store all sales and purchase invoices on MTD compliant accounting software, so that HMRC can easily perform compliance checks, and send up to date tax estimates. Businesses will need to send quarterly income and expense updates and submit an end of year tax return. Furthermore, due to the modernised system, tax surprises will be reduced if you were not previously using accounting software to track your business’ performance.

Who Must Comply with Making Tax Digital

MTD applies to all VAT-registered businesses, as well as individuals and landlords with annual income (revenue, not profit) of £50,001 or above. This includes combined self-employment and landlord income. For example, if you have £26,000 of self-employment income and £26,000 of rental income, you must comply.

New thresholds are planned for April 6th 2027 and 2028, these thresholds are £30,000 (2027) and £20,000 (2028) this will push more people into digital tax. The only exemptions to MTD are:

• You are unable to use digital tools due to disability, or another health condition.
• Your age affects your ability to use digital tools.
• You live in an area where internet access is not available.
• You have religious objections to using digital tools.

HMRC has written to all affected taxpayers asking them to register for MTD. You should have registered by 6 April 2026.

The first quarterly submission will cover the period 6/4/26 to 5/7/26 and must be filed with HMRC by 7/8/26. This submission must include your income and expenses.

How 360 Accountants Support MTD Compliance

At 360 Chartered Accountants, we understand that transitioning to digital tax can be challenging, particularly for businesses and individuals who are unfamiliar with digital accounting systems. Our team can help you choose the most suitable MTD compliant accounting software based on your specific needs and requirements. We also assist with the setup and implementation of the software, ensuring that your digital records are maintained correctly from the beginning. For clients who would like to manage their own bookkeeping, we provide training and guidance to help them use the software effectively and confidently while remaining compliant with HMRC regulations.

As well as helping you choose and set up your software, we provide ongoing support to make digital tax as simple as possible. We can register you for MTD, answer any questions you have, and check your submissions before they are sent to HMRC to help avoid mistakes. If you would rather spend your time focusing on your business, we can also take care of your bookkeeping and MTD submissions for you. Our aim is to make sure you stay compliant with HMRC requirements while reducing the time and stress involved in managing your tax records.

How to Get Started with Making Tax Digital Today

Getting started with Making Tax Digital does not have to be complicated. First, check whether MTD applies to you or your business and understand what records you will need to keep digitally. If you are required to comply, the next step is to register with HMRC and choose MTD-compatible accounting software that meets your needs. Once your software is in place, you should begin recording your income, expenses, and invoices electronically to ensure your records are accurate and up to date.

At 360 Chartered Accountants, we have helped businesses make the transition to digital accounting with confidence. For expert support and guidance on accounting software, bookkeeping, and registering for MTD, get in touch with us now. Businesses trust us to provide reliable support for their accounting and tax needs.

The post Do You Need To Comply With Making Tax Digital? appeared first on 360 Chartered Accountants.

Understanding the rules around an HMRC tax investigation can help you stay compliant, reduce unnecessary stress, and avoid costly mistakes.

Standard HMRC Investigation Time Limits

In most cases, HMRC can investigate tax returns going back 4 years. This applies where a genuine mistake has been made despite taking reasonable care.

However, the time limits increase depending on the nature of the issue:

• 4 years for innocent or accidental mistakes
• 6 years for careless errors
• 20 years for deliberate tax evasion or fraud

So, can HMRC go back more than 6 years? Yes, but usually only where they believe tax has been deliberately underpaid or concealed.

These extended powers are designed to deal with serious non-compliance rather than ordinary administrative errors. For most businesses with organised records and honest reporting, a standard HMRC investigation is unlikely to go beyond the normal limits.

What Triggers an HMRC Investigation?

There is no single reason why HMRC opens an enquiry. Some investigations are completely random, while others are triggered by unusual activity or inconsistencies.

Common triggers include:

• Discrepancies between tax returns and HMRC data (for example P60s and P45s)
• Late filing or repeated errors
• Sudden drops in profit or unusually high expense claims
• Industry-specific compliance campaigns
• Tips or reports from third parties
• Undeclared income identified through digital records or bank information

HMRC now uses advanced data analysis systems to compare information from banks, employers, Companies House, and online platforms. This means even small inconsistencies can sometimes trigger an HMRC tax investigation.

That said, an inquiry does not automatically mean wrongdoing. Many investigations are routine checks designed to confirm information is accurate.

What Happens During an Investigation?

The process depends on the type and complexity of the enquiry. Some investigations are resolved with a simple request for information, while others may involve a detailed review of financial records.

HMRC may ask to see:

• Tax returns and accounts
• Business bank statements
• Payroll records
• VAT records
• Receipts and invoice
• Diaries and calendars
• Mileage records

During an HMRC investigation, it is important to respond promptly and provide accurate information. Ignoring requests or delaying responses can increase scrutiny and potentially lead to higher HMRC penalties.

What Happens if HMRC Finds an Error?

If HMRC discovers a mistake, the outcome depends on the seriousness of the issue and how it occurred.

In many cases, HMRC simply requests repayment of any underpaid tax, plus interest. Additional HMRC penalties may apply depending on whether the error was accidental, careless, or deliberate. HMRC penalties are not tax deductible.

The more cooperative and transparent you are during the investigation, the lower the penalties are likely to be.

Careless Vs Deliberate Errors

HMRC makes a clear distinction between careless mistakes and deliberate tax evasion.

A careless error usually means reasonable care was not taken. Examples include poor record keeping, incorrect calculations, or failing to check figures properly before submission.

Deliberate behaviour is far more serious and involves knowingly providing false information or hiding income to avoid tax.

#This distinction matters because it affects both the length of the HMRC tax investigation and the level of penalties charged. Deliberate errors can result in significantly larger HMRC penalties and investigations reaching back as far as 20 years.

What if I Make an Honest Mistake?

Honest mistakes happen, and HMRC recognises this.

If you took reasonable care and made a genuine error, HMRC is generally more understanding. In many cases, penalties may be reduced or even avoided altogether, especially if you voluntarily disclose the mistake before HMRC contacts you.

Being proactive is often the best approach. Correcting issues early demonstrates cooperation and can significantly reduce the impact of an HMRC investigation.

How Are HMRC Penalties Calculated?

HMRC calculates penalties based on the behaviour involved and whether the disclosure was prompted or unprompted.

Penalties are usually a percentage of the unpaid tax. The percentage increases where HMRC believes the behaviour was careless or deliberate.

Factors that affect penalties include:

• Whether the error was disclosed voluntarily
• The level of cooperation provided
• The quality of records kept
• Whether the mistake was repeated

Strong record keeping and early communication can greatly reduce potential HMRC penalties.

We encourage businesses to also consider the cost of professional representation during an enquiry. Even a straightforward HMRC tax investigation can take significant time to manage. This is why many businesses chose our Tax Investigation Fee Protection Insurance, which can help cover the professional fees involved in dealing with HMRC enquiries and investigations.

How to Protect Yourself Going Forward

Ultimately, filing a complete and accurate tax return is your responsibility, even if you use an accountant. As anyone can call themselves an accountant, it is vital that you use a fully qualified, regulated one. Check they are a member of a professional body such as the ICAEW or ACCA.

The best defence against an HMRC tax investigation is maintaining accurate, organised records and filing returns correctly and on time.

Using cloud accounting software, reconciling accounts regularly, and seeking professional advice can all reduce the likelihood of problems arising. Good financial systems also make it much easier to respond if HMRC ever asks questions.

Many investigations become more stressful because businesses struggle to locate records or explain discrepancies. Staying organised helps avoid this.

Can an Accountant Deal with HMRC for Me?

Yes. An accountant can communicate with HMRC on your behalf and guide you through the investigation process.

At 360 Accountants, we regularly support businesses dealing with an HMRC investigation. We help gather records, respond to HMRC queries, and ensure your position is presented clearly and professionally.

Having expert support can reduce stress, improve communication with HMRC, and help minimise potential HMRC penalties. Most importantly, it gives you confidence that your business is handling the situation correctly.

We’re always on hand to help. Have a question? Contact our team today.

The post How Far Back Can HMRC Investigate Your Taxes? appeared first on 360 Chartered Accountants.

Why Does HMRC Require Record Keeping?

HMRC requires businesses to maintain records so they can verify that the correct amount of tax is being reported and paid, and that you are paying your staff the National Minimum Wage. Keeping tax records also helps you:

• Track income and expenses accurately
• Prepare tax returns efficiently
• Provide evidence if HMRC opens an enquiry
• Make better financial decisions
• With credit control

If your records are incomplete or missing, it can lead to penalties, estimated tax bills, and unnecessary complications.

General HMRC Record-Keeping Rules

The exact time frame depends on your business type, but there are some general rules that apply across the board.

Most businesses must keep financial records such as invoices, receipts, bank statements, payroll records, and tax returns for between 3 and 6 years. These records must be accurate, complete, and accessible if HMRC requests them.

If your return is filed late, or HMRC opens an investigation, you may need to keep records for longer. This is why strong HMRC record keeping processes are so important.

VAT registered businesses must typically keep records for at least 6 years, while employer payroll records usually need to be kept for 3 years from the end of the relevant tax year.

Alongside tax requirements, businesses must also consider data protection laws. Certain HR records, such as job applications or disciplinary notes, should not be kept longer than necessary and may need to be deleted earlier in line with GDPR.

How Long Sole Traders Must Keep Records

If you are self-employed, you must keep your records for at least 5 years after the 31st January deadline for submitting your tax return.

For example, for the 2024 to 2025 tax year, the submission deadline is the 31st January 2026. This means you must keep your records until at least January 3031.

These records include income, expenses, bank statements, and any supporting documentation. Proper record keeping ensures you can confidently complete your Self Assessment and respond to any HMRC queries.

How Long Limited Companies Must Keep Records

Limited companies are required to keep records for 6 years from the end of the financial year they relate to.

This includes:

• Company accounts
• Corporation Tax records
• PAYE and payroll information
• VAT records if registered

Limited companies must also comply with Companies House requirements, meaning their HMRC record keeping obligations are typically more detailed than those of sole traders.

Which Records Should Be Destroyed?

While many records should be retained, it’s equally important to know when records should be securely destroyed.

Under GDPR, personal data must not be kept longer than necessary. This means some records should be deleted or destroyed sooner than tax-related documents, particularly those involving employee or applicant information.

Examples include:

• Job applicant records, typically kept for 6 to 12 months
• Interview notes and recruitment assessments
• Disciplinary and grievance records, depending on company policy
• Right to work documentation, usually kept for 2 years after employment ends

When destroying records, ensure they are disposed of securely, especially if they contain sensitive or personal data. Digital files should be permanently deleted, and paper documents should be shredded.

Digital Vs Paper Records

HMRC accepts both digital and paper records, but digital record keeping is becoming the preferred approach.

Digital systems, including cloud accounting software, allow you to store records securely and access them easily when needed. This is particularly important as Making Tax Digital continues to expand.

Benefits of digital record keeping include improved organisation, reduced risk of loss, and real-time financial visibility. Cloud-based systems also offer automatic backups and secure access from anywhere.

Before ending any subscriptions to cloud accounting software, make sure access can be reactivated if necessary.

Paper records are still acceptable, but they can be harder to manage and more vulnerable to damage or loss. If you use paper, consider scanning and storing copies digitally for added security.

What Happens if Records Are Missing?

If you fail to keep proper records, HMRC can take action.

Missing records may result in HMRC estimating your tax bill, which is often higher than expected. You could also face penalties, especially if poor record keeping is seen as careless or deliberate.

If records are lost due to events outside your control, such as a fire, theft, or technical failure, you should try to reconstruct them using alternative evidence like bank statements or supplier invoices. It is also important to inform HMRC where appropriate.

Strong tax record keeping practices, especially using digital or cloud systems, can significantly reduce the risk of this happening.

How an Accountant Helps With Record Keeping

Managing business records can be time-consuming, particularly as your business grows. An accountant can help ensure your record keeping is accurate, compliant, and efficient.

At 360, Chartered Accountants, we support businesses with everything from setting up cloud accounting software to maintaining organised, compliant financial records. We help you understand how long to keep tax records, ensure nothing is missed, and give you confidence that your business is meeting HMRC requirements.

If you are unsure whether your current record keeping meets the rules, our team is here to help you stay on track.

The post How Long Do You Need To Keep Business Records? appeared first on 360 Chartered Accountants.

Can I Legally Employ Family Members?

Yes, employing family members is legal in the UK. There are no specific laws preventing you from hiring relatives in your business.

However, the same employment and tax rules apply as they would for any other employee. That means family members must:

• Perform genuine work for the business
• Be paid a reasonable wage for the work they do (and at least the National Minimum Wage for their age)
• Be treated as real employees for tax and payroll purposes

If the role is legitimate and the pay reflects the work completed, family employment can be perfectly acceptable.

Problems usually arise when payments are made purely to reduce tax rather than for actual work.

Can I Pay My Spouse Through My Business?

Yes, many small businesses involve a spouse or partner. Paying your spouse through your business is allowed, provided they genuinely work for the company.

When employing a spouse, their salary should reflect the work they actually perform. For example, paying a spouse a large salary when they do very little work could raise questions from HMRC.

When done properly, employing family members such as a spouse can be tax efficient. A salary paid to them is usually treated as a business expense, which reduces your company’s taxable profit.

Can I Employ My Children?

Yes, family employment can include children, but there are important age restrictions and employment rules.

Children under 16 can work in some limited roles, but there are restrictions on hours and the type of work they can perform. For children over 16, employment rules become more straightforward. They can be employed in the same way as other workers and must be paid through payroll.

Common tasks children might carry out in a small business include:

• Filing and basic admin
• Packing orders
• Assisting with stock
• Helping with social media or digital tasks

As with any other employee, wages must be reasonable for the work performed.

Do I Need to Run PAYE?

In most cases, yes. If a family member earns above the relevant thresholds, you must operate HMRC payroll using PAYE, just as you would for any other employee.

This means:

• Registering as an employer
• Running payroll
• Deducting income tax and national insurance where required
• Reporting wages through real time information submissions
• Operating a Work Place Pension Scheme

Even if a family member earns below tax thresholds, you may still need to record their pay correctly through payroll.

Failing to run PAYE when required is one of the most common mistakes businesses make when employing family members.

What Triggers HMRC Issues?

Most businesses that follow the rules will have no problems with family employment. However, there are situations that can attract HMRC scrutiny.

Common red flags include:

• Paying a family member a salary for little or no work
• Paying wages that are far higher than the role justifies
• Making irregular payments without proper payroll records
• Claiming wages as an expense without evidence of work
• Failing to operate PAYE when required
• Not paying the National Minimum Wage

If HMRC reviews your accounts and believes payments were not for genuine work, they may disallow the expense. This means wages cannot be deducted from profits and additional tax may be owed.

Keeping proper records of the work carried out helps avoid these issues.

Is It Tax Efficient to Employ Family?

When structured correctly, employing family members can be tax efficient.

Because wages are normally treated as business expenses, they reduce the profit your business is taxed on. At the same time, family members may have unused personal tax allowances, meaning the income they receive could be taxed at a lower rate.

However, this only works if the arrangement reflects genuine employment. Artificial arrangements designed purely to reduce tax can cause problems with HMRC.

The goal should always be compliance first, with tax efficiency as a secondary benefit.

How to Do Family Employment Properly

The safest way to approach family employment is to treat relatives the same as any other employee.

This includes:

• Creating a clear job role
• Paying a reasonable market wage
• Keeping timesheets or records of work
• Running payroll correctly
• Maintaining proper employment records
• Issuing an Employment Contract

While employing family members is common in small businesses, the tax rules can sometimes be misunderstood. A poorly structured arrangement can lead to payroll mistakes or HMRC challenges.

As 360, Chartered Accountants, we help small businesses set up compliant payroll systems, structure family employment correctly and ensure wages are handled in a tax efficient way. Need some advice? Get in touch with 360 Accountants today.

The post Can You Employ Family Members in a Small Business? appeared first on 360 Chartered Accountants.

The good news is that with the right setup and support, hiring does not have to be stressful. At 360 Accountants, we help small businesses and sole traders take this step with confidence.

Before You Hire Your First Employee

Before your new employee starts, there are a few essentials to put in place. These ensure you stay compliant with the law and avoid nasty surprises later.

1. How Do I Register As An Employer?

You must register with HMRC as an employer before you pay anyone. This tells HMRC that you are going to run payroll and operate PAYE.

You can register online on the GOV.UK website. You will need details about your business, such as your business name, address and contact information. Once registered, HMRC will send you:

• An Employer PAYE Reference
• An Accounts Office Reference

You’ll use these every time you deal with HMRC about payroll.

We recommend registering at least two weeks before your first payday, as it can take time for HMRC to issue the details.

2. What is PAYE?

PAYE stands for Pay As You Earn. It’s the system HMRC uses to collect Income Tax and National Insurance from employees’ wages.

Instead of your employee paying tax directly, you deduct it from their pay each time you run payroll. You then send that money to HMRC on their behalf, along with any Employers’ National Insurance you may have to pay.

3. How Does PAYE Work?

Each time you pay your employee, you:

1. Calculate their gross pay
2. Deduct Income Tax and Employee’s National Insurance using their tax code
3. Deduct any other items such as student loan repayments or pension contributions
4. Pay the net amount to the employee
5. Report the details to HMRC through payroll software
6. Pay HMRC what you have deducted, usually monthly

This process has to be done accurately and on time. Late or incorrect submission can lead to penalties.

4. Set Up Payroll Software

You must use payroll software that is recognised by HMRC. This is how you calculate pay, deductions and submit information to HMRC in real time.

Many business owners start with basic software, but as things grow, it can become time consuming. This is where using an accountant to run payroll can save you time and reduce risk. Check out our payroll services.

5. Check Minimum Wage Rules

You must pay at least the National Minimum Wage or National Living Wage, depending on your employee’s age and status. Rates change regularly, so it is important to keep up to date.

Paying below the legal minimum wage can lead to fines and reputational damage. We always make sure our clients are paying the correct rates.

Ensure you take any unpaid overtime into account when checking your employee is being paid above the National Minimum Wage.

6. Prepare an Employment Contract

While this guide focuses on tax and payroll, you also need a written statement of employment particulars. This includes things like pay, hours, holiday and notice periods. This protects both you and your employee.

7. Other Responsibilities

You’ll need to have Employers’ Liability Insurance in place and comply with the various health and Safety in the Workplace regulations.

After You Hire Your First Employee

Once your employee is on board, your responsibilities do not stop. You’ll need to manage payroll properly each pay period and stay compliant with HMRC and pension rules.

1. Run Payroll Every Pay Period

Each time you pay your employee, you must:

• Calculate wages and deductions
• Submit a Full Payment Submission to HMRC on or before payday
• Keep accurate payroll records

This has to be done whether you pay weekly, fortnightly or monthly.

2. Pay HMRC

You will usually pay HMRC monthly for the tax and National Insurance you have deducted. The deadline is the 22nd of the following month if you pay electronically.

Missing deadlines can result in interest and penalties.

3. Provide Payslips

You must give your employee a payslip showing their gross pay, deductions and net pay. This can be digitally or on paper.

4. Keep Records

You need to keep payroll records for at least six years. This includes pay details, deductions and reports sent to HMRC.

Workplace Pensions

Do I Need a Workplace Pension?

In most cases, yes. If you employ staff in the UK, you must assess them for automatic enrolment into a workplace pension scheme.

If your employee:

• Is aged between 22 and State Pension age, or
• Earns above the earnings threshold

Then you must automatically enrol them into a pension scheme and make employer contributions. Even if they do not meet the criteria, you still have duties to provide information and offer a scheme in certain situations.

Pensions can be confusing, but you are not alone. At 360 Accountants, we help clients set up pension schemes and manage ongoing contributions as part of our payroll service.

Payroll

Are There Any Payroll Mistakes to Avoid?

Yes, and they are more common than you might think. Here are a few we see regularly:

• Registering late with HMRC and missing the first payroll submission
• Using the wrong tax code
• Paying staff without submitting reports to HMRC
• Missing pension duties
• Paying the wrong minimum wage
• Not keeping proper records

Each of these can lead to penalties, backdated payments or unhappy employees. Getting things right from day one saves time, money and stress later.

Can An Accountant Run Payroll For Me?

Absolutely! In fact, many small business owners choose to outsource payroll so they can focus on running and growing their business.

At 360 Accountants, we act as a payroll partner for our clients. That means:

• We set up your payroll correctly
• We calculate pay and deductions
• We submit reports to HMRC on your behalf
• We produce payslips for your employees
• We handle pension contributions
• We make sure everything is compliant

You still stay in control, but you don’t have to worry about the technical details or deadlines.

How 360 Accountants Can Help

We’re a Hull based firm supporting SMEs and sole traders across England and Wales with payroll, PAYE, pensions, bookkeeping and tax planning. When you hire your first employee, we guide you from HMRC registration right through to running payroll every pay period.

Our job is to make sure your systems work smoothly, your staff are paid properly, and your business stays compliant, so you can focus on growing with confidence. Get in touch with us today.

The post Hiring Your First Employee: Tax & Payroll Basics appeared first on 360 Chartered Accountants.

We’ve compiled a list of the most important takeaways from the 2025 Autumn Budget for businesses across the UK.

Will the minimum wage increase in 2026?

Yes, the National Minimum Wage will increase from 1st April 2026.

360 Accountant’s Andy Steele says:

Businesses should calculate the impact on wage costs as a matter of urgency and decide on a strategy to minimise impact on the bottom line.”

Will there be changes to ISAs in 2027?

In a bid to encourage more investment, the Chancellor has announced there will be new restrictions to the amount of money that can be saved tax-free in a cash ISA. The cash limit will be reduced from £20,000 to £12,000. The lost £8,000 will be available to be placed in investments.

This change doesn’t apply to any one over 65.

We recommend you speak to an independent financial adviser (IFA) before making any further contributions to ISAs.

New Funding for SMEs

SMEs across the country will be eligible for fully-funded training for all employees under 25.

360 Accountant’s Andy Steele says:

This appears to be a U-turn on changes to apprenticeship funding in a previous budget. If you are considering employing an apprentice or young person, you should research whether or not you will qualify and whether or not the courses are partly or fully funded.”

Higher Corporation Tax

Some Capital Allowances will be reduced from 18% to 14% from April 2026. This change could mean higher Corporation Tax bills for some companies.

360 Accountant’s Andy Steele says:

Businesses that are concerned about this change are encouraged to talk to their accountants about the timing of capital expenditure.”

Changes to Rental, Dividend & Savings Income

From April 2026, there will be a +2% increase on tax for any dividend income.

From April 2027, there will be a +2% increase on any savings or rental income.

360 Accountant’s Andy Steele says:

If you are a landlord and are concerned about how this will affect you, we recommend speaking to your accountant about structuring your affairs in the most tax efficient manner.”

Changes to Electric & Hybrid Vehicles

Driving an electric vehicle will become more expensive from April 2028. Electric vehicle (EV) drivers will be charged 3p per mile, and hybrid vehicles will be charged 1.5p per mile on top of Vehicle Excise Duty.

Council Tax Surcharge for Homes Worth More Than £2m

There will be a new ‘Annual Charge’ for anyone living in a home that’s worth more than £2m. This tax surcharge will come into effect from April 2028.

There will be four price bands for this surcharge. We know at the moment that if a property is worth £2m, the surcharge will be £2,500, and if a property is worth over £5m, the surcharge will be £7,500.

This change is being referred to as the ‘Mansion Tax’, but may also capture homes in expensive areas. It is estimated that this surcharge will be levied on around 100,000 properties, most of which are in the London and South East of England.

Other Autumn Budget 2025 Highlights

• Voluntary Class 2 National Insurance contributions will be removed from some people living abroad – please speak to your accountant if this applies to you.
• Changes to Salary Sacrifice from 2029 – if you use this, we encourage you to speak to your accountant to develop a strategy for efficient remuneration over the course of the next few years.
• New ‘National Licensing Framework’ will encourage councils to support late night venues and pubs.
• £1 in every £10 the government spends is on debt interest.
• Luxury vehicles will be removed from the Motability Scheme.
• Income tax and NIC thresholds remain the same until 2031.
• Income Tax and VAT rates remain the same until 2031.
• Bingo Duty removed from April 2026.
• Remote Gaming Duty increasing from 21% to 40% on 1 April 2026.
• Remote bets on UK horse racing will remain unchanged.
• Two child benefit cap will be removed from April 2026.

Have any questions? Please do get in touch with our team and they’ll be happy to help you.

01482 427360

help@360accountants.co.uk

The post Autumn Budget 2025: Key Takeaways appeared first on 360 Chartered Accountants.