Startup accounting checklist: your first 12 months

The decisions made at incorporation are the hardest to undo. Issue founder shares at nominal value before the company has value, agree vesting in writing even between friends, and keep the share structure simple ordinary shares if SEIS, EIS or EMI might ever matter.

Register for corporation tax within three months of starting to trade, open a business bank account in the company's name, and keep company money genuinely separate from personal money. Mixed accounts are the root of most first-year bookkeeping problems and most director loan account surprises.

Set up cloud bookkeeping with a bank feed, and get into the habit of capturing receipts as they happen. Directors have a statutory duty to keep adequate accounting records; 'adequate' in practice means records that let you show, at any time, the company's financial position with reasonable accuracy.

If you might claim R&D relief, start the technical record now: which projects, which uncertainties, who worked on them and roughly what proportion of their time. Reconstructing this two years later is the single biggest reason claims fail a compliance check.

Register for PAYE before the first payday, including for a director's salary. Register for VAT once taxable turnover passes £90,000 in a rolling twelve months, or voluntarily earlier if your customers are VAT-registered businesses and you have real input tax to recover.

If you plan to raise from angels, apply for SEIS advance assurance well before you need it, it takes weeks. If you plan to give employees equity, set up EMI before you make verbal promises, because valuations follow expectations badly.

Your first confirmation statement is due a year after incorporation. First accounts are due 21 months from incorporation, then nine months from each period end. The company tax return is due twelve months after the period end, but the tax itself is payable nine months and one day after it, pay date comes before filing date, which surprises almost everyone.

Book the year end in your calendar three months early. A company that closes its books in month thirteen instead of month twenty-one always pays less in remedial work and usually finds reliefs that would otherwise have expired.