20 May 2025

Accounting in England: A Guide to Legal Obligations, Processes, and Digital Transformation

A comprehensive guide on accounting processes and legal obligations in the UK. Learn how to keep your company's financial records accurate and timely.

Starting a company in England is not limited to the establishment process; it also involves regular accounting procedures and the fulfillment of legal obligations. In this guide, we will thoroughly address accounting processes, legal requirements, and the impacts of digital transformation in England.

Fundamentals of Accounting in England

Accounting Approaches According to Company Type

Limited Companies (Ltd): Preparation of annual accounts and submission to Companies House is mandatory
Sole Traders: Regular tracking of income and expenses and submission of tax returns is required
Limited Liability Partnerships (LLP): Accounting transactions are carried out based on the income shares of the partners

Maintenance of Financial Records

Companies must regularly maintain the following records:

Income and Expense Records: Detailed records of all financial transactions
Asset and Liability Records: Tracking of the assets owned by the company and liabilities
Inventory Records: Records of existing inventory and inventory movements
Invoices and Receipts: Documents related to all buying and selling transactions

Legal Obligations and Processes

Preparation of Annual Accounts

Companies House: Companies must submit their annual accounts to Companies House at the end of each financial year
HMRC: Additionally, it is required to submit an annual tax return to HMRC (CT600 form)

Tax Returns

Corporation Tax: Companies must make tax payments within 9 months and 1 day from the end of the financial year
VAT Return: VAT registered companies generally submit a VAT return every three months

Digital Transformation: Making Tax Digital (MTD)

The MTD program launched to digitize tax processes in England requires companies to submit tax returns electronically using digital accounting software.

Professional Accounting Services with ORTAC

Managing accounting processes accurately and timely in England is critical for your company's legal compliance and financial health. ORTAC provides you with tailored accounting solutions with our experienced team.

Our Services: