Key takeaways
- UK tax identification numbers: The UK has no single tax ID.
- Profit and loss template and worked example for small businesses: A free profit and loss template for UK small businesses, with a worked example from turnover to profit after tax, the expense lines to use and filing rules.
- Net vs gross: Gross is the amount before deductions; net is what is left after them.
- What is a proforma invoice? Meaning, template and uses: A proforma invoice is a quote set out like an invoice, sent before a sale.
- Fiscal year vs financial year vs tax year in the UK: The UK tax year runs 6 April to 5 April, the financial year 1 April to 31 March, and a company's own year can end on any date.
Accounting basics explains the terms UK business owners meet most often, each in a short page that answers the question first and then gives a worked example. Start with the page that matches your question below.
Guides in this section
| Guide | What it covers |
|---|---|
| UK tax identification numbers: UTR, NI, VAT and company numbers | The UK has no single tax ID. What the UTR, National Insurance, VAT, company, PAYE and EORI numbers look like, where to find each one and which to give as a TIN. |
| Profit and loss template and worked example for small businesses | A free profit and loss template for UK small businesses, with a worked example from turnover to profit after tax, the expense lines to use and filing rules. |
| Net vs gross: what each means for pay, profit and prices | Gross is the amount before deductions; net is what is left after them. How gross and net work for UK pay, profit and VAT prices, with 2026/27 worked examples. |
| What is a proforma invoice? Meaning, template and uses | A proforma invoice is a quote set out like an invoice, sent before a sale. Why HMRC says it is not a VAT invoice, what to include. |
| Fiscal year vs financial year vs tax year in the UK | The UK tax year runs 6 April to 5 April, the financial year 1 April to 31 March, and a company’s own year can end on any date. Which one applies to you and why. |
| Is there an LLC in the UK? The UK equivalents explained | The UK has no LLC. The closest equivalents are the private limited company (Ltd) and the LLP. How each compares with a US LLC on liability, tax and set-up. |
| What is bookkeeping? A beginner’s guide for UK businesses | Bookkeeping is recording every sale, cost and payment your business makes. What UK rules require, how long to keep records. |
| What is a VAT certificate and how do you get a copy? | A VAT certificate (VAT 4) confirms your VAT number and registration date. HMRC does not routinely post one, so download a copy from your VAT online account. |
| What is a credit note? How to issue one in the UK | A credit note reduces or cancels an invoice you have issued. What it must show for VAT, HMRC’s 14-day rule, when you cannot use one. |
| Invoice numbers: HMRC rules and numbering examples | Every UK invoice needs a unique number, and VAT invoices need a sequential one from one or more series. HMRC’s rules on gaps, letters, prefixes and examples. |
| P&L vs balance sheet vs cash flow: what each tells you | The P&L shows profit over a period, the balance sheet shows what you own and owe on one date, and the cash flow statement shows where cash went. |
| Balance sheet format: the order of items under FRS 102 | The statutory balance sheet order for UK companies using FRS 102: Format 1 items A to K, the Format 2 layout, adapted formats and the micro-entity version. |
| Choosing a financial year end for your company | A new company’s year end is set automatically, but you can change it. How the date is set, the rules for shortening or extending it. |
| FRS 102 changes from January 2026: leases and revenue | FRS 102 changes apply to periods from 1 January 2026: most leases go on the balance sheet and revenue follows a five-step model. What changes, when and the tax. |
| How to check a UK VAT number is valid | Check a UK VAT number free on GOV.UK: enter the 9 digits to see the registered name and address, get a reference as proof, and use VIES for XI and EU numbers. |
| What must a UK invoice include? Legal requirements for 2026 | Every UK invoice needs a unique number, both parties’ details, dates, a description and the amount due. The extra rules for companies, VAT invoices and 2029. |
| Gross profit vs net profit: definitions and worked example | Gross profit is sales minus cost of sales; net profit is what is left after every expense, interest and tax. Formulas, margins and a UK worked example. |
| Balance sheet example and template for a UK small company | A worked UK small company balance sheet with two years of figures, a blank template in the statutory Format 1 order, a micro-entity version and how it adds up. |
| Sort code and branch number: what they are | A UK sort code is the six-digit number that routes payments to your bank and branch. Where to find it, what a branch number means and how it fits in an IBAN. |
| Accounts receivable vs accounts payable | Accounts receivable is money customers owe you; accounts payable is money you owe suppliers. How each works in UK accounts, debtor and creditor days. |
| How to do a bank reconciliation by hand | Match your cash book to your bank statement in six steps: tick off items, adjust for bank charges, unpresented cheques and lodgements, prove the balances agree. |
| Equity, share capital and retained earnings explained | Equity is what a company owes its shareholders: share capital, share premium and retained earnings. How each works. |
| Turnover vs revenue vs profit: what UK businesses mean | Turnover and revenue both mean sales before costs; profit is what is left after costs. How each is defined in UK law and used by HMRC and Companies House. |
| Chart of accounts: setting one up for a UK small business | A chart of accounts lists every account in your books, grouped into assets, liabilities, equity, income and expenses. How to set one up for UK accounts and tax. |