08 January 2025
What to know about your business tax account (HMRC)
6 minutes
Whether you already have a business tax account and you’re interested in learning more, or you’re gathering all the necessary info before you apply for one, we’re here to help. In this article, we’ll explore what a business tax account is, how to set one up, how to manage it, and what the main benefits are.
Let’s dive in.
What is a business tax account?
A business tax account is an online service provided by HMRC. It’s a handy portal any type of business can use to manage their tax affairs, from individuals and sole traders to limited companies and partnerships. It’s separate from a personal tax account, which some people use to manage their personal taxes, but if you’re an individual or a sole trader, you can access both accounts together.
What tax can you pay with a business tax account?
You can access, manage, and pay four main tax services through a business tax account:
- VAT: The value-added tax that is added to most products and services
- Corporation tax: The tax companies pay on profits
- PAYE for employers [Note to Howden: Please link to “What is PAYE?” once live]: A system to collect income tax and National Insurance from people who are employed
- Self Assessment: A system to collect income tax and National Insurance primarily from people who are self-employed
There are also over 40 other taxes, duties, and schemes that can be accessed through the platform, including:
- Alcohol duty
- Charities
- Economic Crime Levy
- Money laundering supervision
- Pensions Online Digital Service
- Personal tax account
- Shared workspace
What else can you do with a business tax account?
Paying tax is just one of many things you can do with a business tax account. You can also:
- Conduct admin: Take care of various administrative tasks such as updating your login details, changing your security preferences, and opting to receive paperless notifications.
- Communicate: Change your contact info, check any messages you’ve received from HMRC through a secure system, and contact HMRC if you have any questions.
- Manage your account: File tax returns, add or remove taxes from the 40+ services available, add your team members to the account, and manage any tax agents you have. Find out more about how to manage your account below.
How to set up a business tax account
If you’re interested in using a HMRC business tax account to manage your taxes, the first thing you’ll need to do is set one up. Thankfully, the process is pretty straightforward. It involves registering for a Government Gateway user ID (if you don’t already have one). This ID is up to 12 characters long and allows you to access the UK government’s online services, including HMRC.
To up a Government Gateway ID:
- Provide your business email address: To be assigned a Government Gateway user ID, you’ll need to provide an email address and then enter the confirmation code sent to this address.
- Create your password: As with all passwords, make sure it’s unique and strong.
- Complete additional security: This will involve creating a recovery word in case you forget your password. Once you’ve completed this step, you’ll then be provided with your Government Gateway user ID.
- Choose your account type: Pick the account type that’s relevant to your business. For example, if you’re an individual you should choose the Individual account type. Or if you’re a limited company, you should choose the Organisation account type.
- Provide details about you and your business to verify your identity: What you’re asked to provide will depend a bit on your circumstances. For example, HMRC will ask for your National Insurance number if you’re an individual or a sole trader.
Once these steps are complete, you’ll have access to your brand-new business tax account, and you can start adding taxes to it.
How to manage a business tax account
Now that you’ve set up your account, you can use it to manage various aspects of your tax responsibilities. There are four sections to the online platform:
- Home page: This is where your tax cards are displayed. Tax cards detail all the info you need for a particular tax, such as your tax reference number, how to file a return, and if you have an outstanding amount to pay.
- Manage account: This is where you can make changes to your account, such as adding a new tax, deregistering from a tax, and giving others access like team members and tax agents.
- Messages: This is where you can view any messages from HMRC.
- Help and contact: This is where you can find various articles providing more information about different types of tax and how to contact HMRC.
Let’s take a look at some of the most common changes you may want to make.
Managing your tax services
You can add (and remove) any of the 40+ tax services to your account by going to the home page or “Manage account” and clicking on “Get online access to a tax, duty or scheme”. To add a service to your account, you’ll need to have registered for that tax, so do this first if you haven’t already. Make sure to use the same Government Gateway ID as your business tax account. And keep hold of any reference numbers you receive as you’ll need these when adding taxes.
Here’s what you’ll need to add the the four most common types of tax service:
- VAT: Your 9-digit VAT number, when you registered for VAT, where you’re registered for VAT (i.e. your business postcode), whether you’re already submitting VAT returns, the amount from your last return, and the final month of your last VAT accounting period.
- Corporation tax: Your 10-digit corporation tax unique taxpayer reference and your company registration number, or your registered office’s postcode.
- PAYE for employers: Your PAYE reference number, your HMRC office number, and your accounts office reference.
- Self-assessment: Your 10-digit self-assessment Unique Taxpayer Reference, plus your National Insurance number or postcode if you’re an individual or a sole trader.
Depending on the tax service, HMRC might send you an activation code — also called an Activation PIN — in order for you to access that service. This can take up to 10 days to arrive by post, so don’t be concerned if it doesn’t appear right away. Once a service has been added to your account, it’ll be displayed as a tax card on your home page.
You can also choose to remove tax services from your account at any point:
- Deregister: Choose this option if you don’t need to submit returns for this type of tax anymore.
- Stop access: Choose this option if you don’t want information about this type of tax to be included in your account anymore. Note that you’ll still need to file returns for this tax.
Note that, just because you remove certain information from your account, it doesn’t mean it’s disappeared off the face of the earth. The data still exists in the government’s tax systems.
Managing your team
If you’re the account administrator, you can choose to add other team members and give them access to specific tax services. This means you don’t have to do all the work yourself but can rather divvy it up among your team. The functionality to do this is also available under “Manage account”.
Managing your tax agents
You also have the option to give any tax agents (such as accountants) access to your account. Once added, you can authorise them to manage your taxes for you.
- Select the tax service(s) you’d like them to have access to.
- Provide your agent’s code or their own Government Gateway ID — make sure you’ve asked them for this in advance.
- Confirm you’re happy to authorise them.
- If needed, check your emails for a confirmation code and submit this to complete the authorisation process.
Once authorised, HMRC will let your tax agent know that they can now start to manage your tax responsibilities on your behalf.
You can also change your authorised tax agents or remove tax agents from your account.
What are the benefits of a business tax account?
There’s no legal requirement to have a business tax account. But it’s highly recommended as a convenient way for businesses to handle their taxes — a task that can otherwise feel quite overwhelming.
- One place: The main advantage of having a business tax account is that it brings all your tax affairs together under one online platform. This makes it much easier and quicker to manage your taxes, especially if you pay multiple different types.
- Easy access: Having a business tax account brings tax information right to your fingertips. Rather than having to contact HMRC or your accountant for updates on your tax position, you can simply log in and access the info yourself.
- Improved management: There’s a lot to remember when it comes to taxes — what types you owe, when to file your returns, when to make payments, and so on. A business tax account helps you stay on top of all this, so you’re less likely to miss deadlines and risk incurring fines or other penalties.
Quickfire summary
A business tax account is an option available to all types of businesses. It’s an online platform provided by HMRC that allows you to manage your taxes in one place. There are over 40 different tax services you can manage using a business tax account. And you can use the platform to perform administrative tasks and communicate with HMRC.
It’s straightforward to set up and manage your account, including adding new tax services, managing your team members, and authorising tax agents to act on your behalf. While it’s not necessary to have an account, many businesses use one as it makes the tax process much easier.
Want to learn more about businesses? You can also read:
- What business insurance do I need?
- When does the tax year start in the UK?
- When is corporation tax due? Payment rates and deadlines
- READ MORE OF OUR BUSINESS INSURANCE GUIDES
Are you looking for insurance cover to support your business? Get in touch with us! A member of the Howden team would love to help you find the perfect policy!