What is a business tax account? A simple guide

Getting a business tax account will make it easier for you to check your company records and manage your tax responsibilities online.

An HMRC business tax account is a different service to a personal tax account, which you might use to pay your taxes as an individual.

Here’s a simple guide to what a business tax account is and how to make the most of having one.

What is a business tax account?

HMRC’s business tax account is an online service for businesses and self-employed people. You’ll be able to communicate with HMRC online, rather than phoning or writing to them.

Getting a business tax account will make it easier for you to pay and manage your tax responsibilities as a business – think VAT, corporation tax, PAYE for employers, and even Self Assessment tax returns, depending on your business structure.

It’s available to all types of business including sole traders, limited companies, and partnerships. While you’re not legally required to have one, a business tax account will save you time and make it easier to see if you’re up to date with the tax you owe and avoid penalties.

There are over forty more niche taxes, schemes, and duties that you can add to your business tax account, from services like Advance Tariff Rulings to VAT Notification of Vehicle Arrivals (NOVA).

What is a business tax account used for?

According to HMRC, you can use your business tax account to:

check your tax position for taxes that you’ve registered for
see when you need to file a tax return
make returns and payments
add or remove a tax, duty, or scheme
give a team member access to a tax duty or scheme
check secure messages from HMRC
add, view, or change a tax agent (like an accountant)
get help with your taxes
update your contact details
sign up for paperless notifications
change your Government Gateway user ID and security preferences

Can you pay personal taxes from a business account?

If you’re a limited company, your business taxes will be filed separately from your personal taxes. However if you’re a sole trader you can pay Self Assessment tax from your business account.

How to set up your business tax account

You won’t be automatically offered a business tax account. The information you’ll need to set one up will depend on whether you’re registering as a sole trader or a limited company.

First you’ll need to verify your identity with HMRC. This is where you can sign in using your existing Government Gateway ID – be sure to have your National Insurance number to hand.

If you don’t already have a Government Gateway ID you can set one up as part of the sign up process, or do so separately here.

If you’re a sole trader you’ll need your National Insurance number. However if you’re registering for an account as a limited company, you’ll need your Company Registration Number (CRN).

Setting up a business tax account

Visit the HMRC website, go to the Business Tax Account registration page, and choose to register for a new account
Enter your personal details
Enter your business details
Verify your identity
Submit your application – you’ll have to wait for up to ten days for an activation code
Activate your account – your confirmation email from HMRC will come with instructions
Finally, log into your account

How do I manage my business tax account?

Once you’ve signed up and logged in, you should be all set to start managing your business tax account. You’ll be the administrator, but you can give access to team members or your accountant if you wish.

Your account will show you a summary of your business taxes, and generate something it calls a ‘tax card’ for each type of tax you’ve added to it.

Delve into these cards for details about your responsibilities for each type of tax. They’ll show you your tax reference number, if you have a return to complete and your current balance (outstanding or overpaid tax). From your tax card you can also file a return and make a payment.

You can add a specific tax by choosing:

‘get online access to a tax, duty or scheme’ from the home page
‘add a tax, duty or scheme to your account’ from the top ‘manage account’ menu

You can remove a specific tax or scheme by choosing to:

deregister — because you no longer need to make returns
stop access — you will no longer see information about this tax in your business tax account

Are you using a business tax account? Let us know why it’s useful in the comments below.

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