All small businesses must maintain accounting records of their financial income and expenditure and submit information to HMRC at various points in the year. The UK has a ‘self-assessment’ regime, whereby SME’s can manage their own business affairs, without the requirement for an independent audit or compulsory HMRC check.
Most limited companies work with an accountant to help them prepare complex statements like the annual accounts and corporation tax return. Many sole traders also work with an accountant to help them prepare their accounts and tax, although some smaller operators do their own filings with HMRC.
If the business has employees, it must file an online RTI report with HMRC every time wages or salaries are paid, and bigger SME’s must also charge VAT and file quarterly VAT returns.