So you’re starting a business this year? Good for you. But before you get lost in designing logos and perfecting your LinkedIn bio, we need to talk about the boring stuff. Tax. Because while it’s definitely not the glamorous part of entrepreneurship, it’s the part that can absolutely wreck your day if you ignore it. Here are the classic mistakes nearly every new founder makes – and how you can avoid them.
Mistake 1: Playing hide and seek with HMRC
You need to register as self-employed or set up a limited company the moment you start trading. Not when you’re “making real money” or when it “feels official.” The moment you sell something or send that first invoice. Miss the registration deadline – 5th October following the end of the tax year you started – and HMRC will fine you regardless of whether you actually earned anything worth mentioning.
Mistake 2: Treating bookkeeping like future-you’s problem
Here’s the reality: if you don’t track your money from day one, tax time becomes an absolute nightmare. You’ll be there at 2am trying to reconstruct six months of transactions from bank statements and faded receipts. Keep digital copies of receipts. HMRC stopped wanting shoeboxes full of paper years ago.
Mistake 3: Leaving money on the table
New founders often massively under-claim expenses because they’re “not sure” what they’re allowed to deduct. If it helps you run your business and you can prove you bought it, you can probably claim it. People regularly forget about their phone bills, internet costs, training courses, business books, travel to meetings, client coffees, and co-working space fees. Even a portion of your rent if you work from home. When in doubt, track it anyway. You can always double-check with an accountant later, but you can’t claim expenses you haven’t recorded.
Mistake 4: Going it alone for too long
Tax doesn’t have to be overwhelming, but Google and YouTube can only take you so far. If you’re earning decent money or planning to scale quickly, talking to an accountant early can save you serious cash. A short consultation might prevent thousands in avoidable tax or help you spot allowances you’re missing. Think of it as an investment in not making expensive mistakes.
The bottom line
Starting a business should be exciting, not stressful. Sort out these tax basics early and you’ll be ahead of most new business owners before they’ve even filed their first return. The founders who get this right treat tax planning like any other business system – boring but essential infrastructure that lets them focus on the fun stuff. Don’t be the person scrambling to figure this out at the last minute. Your business deserves better than that.
