Starting a Business in Scotland? Here’s What You Need to Know About Accounting

Starting your own business is exciting — but it also comes with a steep learning curve, especially when it comes to accounting. From registering your company to understanding tax obligations and choosing the right tools, getting your finances right from day one can save you time, money, and stress later.

At Scottish Accountancy Services, we’ve supported hundreds of entrepreneurs across Scotland. Whether you're launching a consultancy, opening a shop, or freelancing full-time, here’s your essential accounting guide to starting strong.

1. Choose the Right Business Structure

Your first big decision is choosing your legal structure. In the UK, the most common types are:

• Sole Trader: Simple setup, lower admin, but you're personally liable.

• Limited Company: Separate legal entity, offers liability protection, and may offer tax benefits.

• Partnership: Shared responsibilities and profits between two or more people.

📌 Tip: The right structure affects your tax, legal responsibilities, and personal risk. We can help you choose what’s best for your goals.

2. Register with HMRC or Companies House

Depending on your business type:

• Sole traders must register with HMRC for Self Assessment.

• Limited companies register with Companies House and must follow stricter reporting and tax rules.

• You’ll also need to register for VAT if your turnover exceeds £90,000.

Failing to register on time can result in penalties — so don’t delay.

3. Set Up a Business Bank Account

While it’s not legally required for sole traders, opening a separate business bank account is strongly recommended. For limited companies, it’s essential.

A dedicated account makes it easier to:

• Track income and expenses

• Reconcile your records

• Provide clean information to your accountant

4. Start Keeping Records from Day One

Good recordkeeping is vital for:

• Completing tax returns

• Claiming business expenses

• Preparing for HMRC reviews

Keep digital copies of:

• Invoices and receipts

• Bank statements

• Mileage and travel logs

• Supplier and customer payments

5. Understand Your Tax Responsibilities

Depending on your structure and income, you may need to pay:

• Income Tax (as a sole trader or director)

• National Insurance Contributions (NICs)

• Corporation Tax (if you're a limited company)

• VAT (if your turnover exceeds the threshold)

You'll also need to file:

• Annual tax returns

• Quarterly VAT returns (if registered)

• Year-end accounts (for limited companies)

Working with an accountant ensures deadlines are met and opportunities to reduce your tax bill aren’t missed.

6. Claim Business Expenses

Running a business isn’t cheap — the good news is many of your costs are tax-deductible. Examples include:

• Equipment and tools

• Office rent or home office use

• Software subscriptions

• Travel and mileage

• Marketing and advertising

Even startup costs (like branding or website design) may be claimable.

7. Don’t Go It Alone

Starting a business doesn’t mean you have to figure out everything yourself. A qualified accountant can help you:

• Set up your books properly

• Choose the right tax structure

• Stay compliant with HMRC

• Save time and avoid penalties

• Make informed financial decisions as you grow

At Scottish Accountancy Services, we offer startup-friendly packages that make it easy to get expert support without breaking the bank.

Final Thoughts

Getting your accounting right from the beginning sets your business up for long-term success. By staying organised, informed, and compliant, you’ll spend less time worrying about HMRC and more time building your business.

Starting a Business? Let’s Talk

Whether you need help registering, picking software, or just understanding what to do next — we’re here for you.
📞 Book a free consultation today and let’s get your new venture off to the best start.