What good looks like
A business turning over about £250,000
At about £250,000 a year, the owner may still run the finances day to day, with an accountant for the yearly work. One legal point that may now apply, and would not below £90,000 of taxable turnover, is VAT registration.
The short answer
A business at this size must be VAT registered if its taxable turnover over the last 12 months went over £90,000, so it may well be registered and keeping VAT records digitally. Beyond that, the law asks for little more than annual accounts and tax returns. Regular figures and a simple cash forecast are good practice rather than a requirement. Whether you need more depends on staff, borrowing and growth as well as turnover.
The legal points at this turnover
- VAT. You must register if your total taxable turnover for the last 12 months goes over £90,000, or if you expect it to go over £90,000 in the next 30 days.1 Turnover of £250,000 is above that line, but only taxable turnover counts. Some businesses with mainly VAT-exempt sales will not need to register.
- Digital VAT records. Making Tax Digital requires VAT-registered businesses to keep records digitally, in compatible software. HMRC can grant an exemption in some cases, for example where digital tools are impractical.2
- Company accounts. A limited company counts as a micro-entity if it has two of these three: turnover of £1 million or less, £500,000 or less on its balance sheet, 10 employees or less.3 These limits apply to financial years starting on or after 6 April 2025.4 A company at this turnover may well qualify, which allows simpler accounts.
- Audit. A private company can be exempt from audit if it meets at least two of: turnover of no more than £15 million, assets of no more than £7.5 million, 50 or fewer employees on average. Some companies must be audited anyway, for example some subsidiaries.5
- Staff. If you employ anyone, you normally need to register as an employer with HMRC, before the first payday.6 Employers also have to provide a workplace pension scheme for eligible staff.7
What support a business this size may have
| Kind of support | What a business this size may have | Basis |
|---|---|---|
| Bookkeeping and systems | Records kept in accounting software by the owner or a part-time bookkeeper. If VAT registered, VAT records kept digitally. | Legal requirement (digital VAT records, if registered). Our judgement (who does it). |
| Accounts, tax and VAT | Annual accounts and tax returns, prepared by an accountant. VAT returns if registered. | Legal requirement |
| Monthly management information | Possibly none yet. Quarterly figures from the bookkeeping software may be enough for a steady business. | Published guidance (ICAEW: quarterly, better still monthly)8 |
| Planning and cash forecasting | A simple forecast of cash for the coming months, so VAT and tax bills do not come as a surprise. | Published guidance (ICAEW on cashflow forecasts)8 |
| Financial controls and approvals | The owner approves every payment and checks the bank account. | Our judgement |
| Finance leadership | The owner, with advice from the accountant when needed. Not needed yet on turnover alone. | Our judgement |
| Specialist support | Only for particular questions, such as selling abroad or a tax question outside the accountant's usual work. | Our judgement |
The ICAEW says "Most businesses need to produce quarterly operating statements and, better still, at monthly intervals."8 We have set the bar lower at this size because a business with steady sales and no borrowing may manage with less. That is our judgement, for our reviewer to check.
What else matters as much as turnover
Two businesses with the same turnover can need very different support. At this size, these can change the picture:
- Staff. Taking on the first employee brings payroll and workplace pensions.
- Borrowing. A lender may ask for recent management accounts. For example, Allica Bank asks for 12 months of management accounts less than 60 days old, or full accounts for the last two years less than six months old, for business loans up to £75,000.9 One lender's rule, given as an example.
- Stock. A business holding stock has cash tied up in it, so a cash forecast matters more.
- Growth. Fast growth can leave a profitable business short of cash.
- Selling abroad. This can bring VAT and customs questions that an accountant without that experience may not cover.
Questions to ask your accountant
- Are we close to needing anything we do not have now, such as VAT registration or payroll?
- Could you send us quarterly figures, and what would that cost?
- Can you help us set up a simple cash forecast?
See the next size up: a business turning over about £1 million.
About this standard
This describes what a business of about this turnover may have. It is a working assumption from published guidance, not a survey average, and not a rule your accountant must follow. How our standards work.
Sources
- GOV.UK, "Register for VAT: when to register". gov.uk/vat-registration/when-to-register. Checked 12 October 2026.
- HMRC, "VAT Notice 700/22: Making Tax Digital for VAT", sections 1.2 and 2.1. gov.uk. Checked 12 October 2026.
- GOV.UK, annual accounts guidance, "Micro-entities, small and dormant companies". gov.uk/annual-accounts/microentities-small-and-dormant-companies. Checked 12 October 2026.
- The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024 (SI 2024/1303), regulations 2(2) and 9. legislation.gov.uk. Checked 12 October 2026.
- GOV.UK, "Audit exemptions for private limited companies". gov.uk/audit-exemptions-for-private-limited-companies. Checked 12 October 2026.
- GOV.UK, "Register as an employer". gov.uk/register-employer. Checked 12 October 2026.
- GOV.UK, workplace pensions guidance for employers. gov.uk/workplace-pensions-employers. Checked 12 October 2026.
- ICAEW, "Managing your business" (Find a Chartered Accountant, help with your business). icaew.com. Checked 12 October 2026.
- Allica Bank, "Business loans" (lender requirements). allica.bank/business-loans. Checked 12 October 2026. One lender's rule, given as an example.