Running a small business anywhere is hard work — and in the North East, where margins can be tight and competition strong, every penny really does count.
At Friendly Assist Accountancy, we work with small business owners, sole traders and contractors right across the region — from Newcastle and Sunderland to Durham, Middlesbrough and beyond — helping them keep more of their hard-earned cash and stay compliant with HMRC rules.
Here are our practical money-saving tips to help you avoid costly mistakes and run your business more efficiently. Just like the boy caring for the plants, we can take care of your finances.
1. Keep bookkeeping simple — spreadsheets still work!
Good bookkeeping doesn’t have to mean expensive software. The most important thing is to keep your records accurate and up to date.
- If you’re comfortable with Excel or Google Sheets, that’s absolutely fine — especially for smaller businesses.
- You can still use spreadsheets for Making Tax Digital (MTD) as long as you use “bridging software” that links your spreadsheet to HMRC. You can find a list of compatible options on GOV.UK:
Find software that’s compatible with Making Tax Digital for Income Tax - Choose one master spreadsheet with tabs for income, expenses, and VAT if applicable.
- Keep your bookkeeping routine regular — ideally update it weekly or fortnightly.
Friendly Assist Accountancy Tip:
If you’re not sure which approach suits you best, start with a spreadsheet now and move to software later when your business grows. The main thing is to stay organised.
2. Common bookkeeping mistakes we see
Even with the best intentions, some errors can cost small businesses in the North East time and money. Here are the big ones to watch out for:
- Mixing business and personal spending. Always use a separate bank account for business.
- Forgetting small expenses. Little things like travel, parking or stationery can add up.
- Not reconciling your records. Make sure income and expenses match your bank statements.
- Missing or lost receipts. Keep digital copies or use apps that store them safely.
- Over-claiming or under-claiming capital allowances. For example, not all equipment qualifies as plant or machinery. HMRC has guidance on common errors:
Common areas of error in claims for plant and machinery allowances
Friendly Assist Accountancy Tip:
Set aside 30 minutes every week to check your figures. It’s easier than spending two stressful days fixing errors before the tax deadline! – Even better have it checked by Experts
3. Claiming for using your home as your office
Many North East business owners — from tradespeople doing admin at home to freelancers and consultants — use part of their home for work. You can claim part of your household costs against tax.
You have two options:
- Simplified flat-rate claim:
If you work from home at least 25 hours a month, you can claim a flat rate:- 25–50 hours per month: £10/month
- 51–100 hours: £18/month
- 101+ hours: £26/month
- Actual cost method:
Work out how much of your home you use for business. For example, if you use one room out of five, you could claim 20% of certain costs (electricity, heating, internet, etc.), adjusted for the time it’s used for business.
Always keep notes showing how you worked out the amount.
Friendly Assist Accountancy Tip:
If you only use your kitchen table for a few hours a week, keep it simple — use the flat-rate method. If you have a dedicated office room, calculate the actual proportion for a better result.
4. Subcontractors, payments, and tax implications
If you hire subcontractors — especially in construction, joinery, or other trades common across the North East — it’s essential to handle payments correctly.
- Check if the subcontractor is registered under the Construction Industry Scheme (CIS).
- If they’re not registered, you must deduct 30% tax from payments (20% if they are registered).
- Only the labour part of the payment is subject to deduction — not materials or VAT.
- Keep accurate CIS records and submit monthly returns to HMRC.
Failing to do this properly can result in fines or lost tax reliefs.
Friendly Assist Accountancy Tip:
Set up a simple “Subcontractor File” for each worker with:
- Their CIS registration status
- HMRC verification number
- Payment details and deductions
This keeps everything tidy and avoids HMRC headaches later.
5. Claiming for equipment — avoid capital allowance errors
Buying tools, equipment, or computers? You may be able to claim tax relief — but it’s easy to make mistakes.
Common issues include:
- Claiming on leased or hired items when you don’t actually own them.
- Including non-business items or personal-use portions.
- Using the wrong accounting period for the claim.
HMRC has highlighted these as common problem areas, especially for small firms.
See: Common areas of error in claims for plant and machinery allowances
Friendly Assist Accountancy Tip:
Keep a simple “asset log” listing what you’ve bought, how much it cost, and how much is for business use. Review this list each year before you do your tax return.
6. Quick savings checklist
Before you hit “submit” on your next tax return, check you’ve:
- Kept your records consistent (spreadsheet or software is fine).
- Separated business and personal spending.
- Claimed reasonable home-working expenses.
- Verified subcontractors and deducted CIS where required.
- Logged your equipment purchases properly.
- Checked your capital allowances.
And most importantly — reviewed everything at least quarterly, not just in January!
Final Thoughts
At Friendly Assist Accountancy, we believe small businesses in the North East deserve clear, practical support — not jargon or hidden fees. Whether you’re a tradesperson, freelancer, or local retailer, we’ll help you save money, stay compliant and feel confident about your finances.
If you’d like a quick review of your bookkeeping, or help setting up your system properly, get in touch today — we’re always happy to offer friendly, no-pressure advice.