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Financial Compliance Checklist for UK SMEs

/ SME

Author: Jason Burton

Running a small or medium-sized enterprise (SME) in the UK can be incredibly rewarding, giving you the freedom and flexibility to do what you love, in a way that suits your life, goals, and aspirations. But that doesn’t mean that it doesn’t come with its own challenges, including a range of responsibilities that have to be taken care of – especially when it comes to finances and compliance. 

From sole traders to limited companies, staying on top of your financial obligations isn’t just good practice, it’s essential for avoiding penalties and fostering long-term growth.

We’ve compiled a checklist of the key financial compliance requirements UK SMEs need to meet in 2025, including any recent changes you should know about. So whether you’re just starting out or running an established business, you can feel safe in the knowledge that all your financial bases are covered. 

1. Company Accounts & Corporation Tax

If your business is registered as a limited company, you’re legally required to:

  • File Annual Accounts with Companies House.
  • Submit a Corporation Tax Return (CT600) to HMRC.
  • Pay any Corporation Tax that you’re liable for – with Corporation Tax rates currently at 19% or 25%, depending on your profits.

Deadlines:

  • You must file accounts within 9 months of your company’s year-end.
  • You must submit your tax return within 12 months of year-end.
  • You must pay any Corporation Tax within 9 months and 1 day after your accounting period ends.

2. PAYE & Payroll Compliance

If the business you own employs staff, then you are legally responsible for operating PAYE (Pay As You Earn) correctly. This includes:

Monthly Deadlines:

  • RTI submissions must be complete on or before payday.
  • PAYE/NICs payments are due by the 22nd of the following tax month (19th if paying by post).

Recent Change: HMRC now imposes penalties for late RTI filings – even if no payment is due. Consistent lateness also increases your chances of an audit, so it’s important to remain on top of filing timings.

3. VAT Returns

If your turnover exceeds £90,000 (as of 1 April 2024), you must register for VAT. Once registered, you’ll need to:

  • Charge VAT on your taxable sales.
  • File quarterly VAT returns.
  • Pay any VAT due.

Deadlines:

  • VAT deadlines are usually 1 calendar month and 7 days after the end of your accounting period.

Note: With Making Tax Digital for VAT fully in place, VAT-registered businesses must use compatible software to submit returns and maintain digital records. This applies even for businesses that are below the threshold, but who have voluntarily registered.

4. Self-Assessment for Directors & Sole Traders

If you’re a sole trader or a company director who takes dividends, or if you have any other form of untaxed income, you’ll likely need to file a Self-Assessment tax return.

Key Dates:

  • You need to register by 5th October, following the end of the tax year.
  • You need to file online by 31st January.
  • You must pay any tax owed by 31st January, with a second payment on account by 31st July (if applicable).

Tip: Early filing gives you time to prepare for any payments due, and reduces the risk of last-minute mistakes. Don’t forget things like tax allowances for sole traders, which should be explored fully before submission.

5. Pension Auto-Enrolment

All UK businesses who employ staff must offer a workplace pension scheme, and must automatically enrol their eligible employees. As a business owner, you’ll need to:

  • Monitor employee eligibility regularly.
  • Make contributions, with the minimum total pension contribution for eligible employees currently at 8% of their qualifying earnings – with a minimum of 3% from the employer.
  • Declare compliance to The Pensions Regulator.

Failure to comply with pension requirements can result in fines, starting from £400 and rising daily, depending on the size of the business.

6. Business Insurance Compliance

While not strictly a tax obligation, having the correct business insurance is a legal requirement in certain cases, and therefore an important financial consideration for business owners in the UK. You’ll need to explore your insurance compliance requirements, such as:

  • Employers’ liability insurance, which is mandatory if you have staff.
  • Professional indemnity or public liability insurance, which may be essential depending on the sector in which you operate.

Tip: Ensure that your policies accurately cover all bases relevant to your business, and renew policies promptly. Discuss your requirements with a reliable, qualified insurance broker. 

7. Record Keeping

Under UK law, you must keep financial records for at least 6 years; in some cases, this term can be even longer. The records you must keep includes:

  • Invoices and receipts.
  • Bank statements and payroll records.
  • Tax returns and correspondence with HMRC.

Tip: Digital records are increasingly preferred, and often required under MTD legislation, so ensure that your records are cloud-compliant and digitally available. 

How Working With an Accountant Can Help

Financial compliance isn’t a once-a-year job, or a tick-box exercise. It’s a year-round, constant commitment, and it’s essential to protect your business against unnecessary risks. 

Legislation in the UK changes on a fairly frequent basis, and with penalties for even minor infractions, it can be easy to get caught out. Partnering with a professional accountant ensures you never miss a deadline, maximise allowable expenses and reliefs, and remain compliant with evolving regulations – while giving you back the headspace to focus on growing your business.

At AIMS Accountants, we specialise in helping SMEs navigate their financial responsibilities. If you’re unsure whether you’re meeting all your legal requirements, get in touch with an AIMS Accountant today.