Open a Small Business file with CPA.DIGITAL
A special tax track for self-employed with low income. Significant reductions in income tax and National Insurance — perfect for entrepreneurs starting out.
What is a Small Business and who is it for?
Small Business is a tax track designed to ease the burden on small business owners. Within the track, the tax rate is significantly lower than the regular tax for self-employed, and National Insurance payments are also reduced.
It is important to understand that Small Business is a tax track, not a business type. In practice, a Small Business can also be an Exempt Dealer (if income is below the threshold) or a Licensed Dealer (if income is higher or by choice).
The track suits freelancers starting out, owners of side businesses alongside salaried work, and small service providers who want to reduce their tax burden.
How does the online Small Business registration work?
The process includes opening files with Income Tax and National Insurance, plus a special application to join the Small Business track. If you also want to be a Licensed Dealer, you must add a VAT file.
The CPA Digital system lets you complete the entire registration in one place — no physical meetings or manual document submissions required.
What does the process involve?
- Opening an Income Tax file. Declaration of starting business activity, choice of the right path (Exempt or Licensed Dealer) and submission of an application to join the Small Business track.
- Application for Small Business recognition. Submitting an official application to join the special tax track — including an income forecast and meeting the threshold conditions defined in the track.
- National Insurance registration. Setting the status as self-employed in the Small Business track, which affects monthly National Insurance and health insurance payments.
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Pros and cons of Small Business
Before choosing the track, it is important to understand its unique advantages and the limitations it imposes.
יתרונות
- Significantly lower income tax rate
- Reduced National Insurance payments
- Simple registration process
- Suitable for side activity alongside salaried work
- Significant relief for businesses starting out
חסרונות
- Limited income ceiling within the track
- Crossing the threshold means switching to a regular track
- Certain reporting requirements to maintain eligibility
- In some cases less attractive than a regular Licensed Dealer
- Full personal liability
Small Business vs Exempt Dealer — what is the difference?
Exempt Dealer is a VAT status — it determines whether the business charges VAT. Small Business is a tax track — it determines how income tax and National Insurance are calculated.
A business can be both an Exempt Dealer and on the Small Business track at the same time — they do not conflict. At CPA Digital we will help you choose the combination most suitable for your activity.
How much does it cost to maintain a Small Business over time?
One of the main advantages of the track is the low monthly tax cost. In addition, similar to an Exempt Dealer, you should account for basic National Insurance payments.
You should also account for bookkeeping and annual report filing. CPA Digital offers all these services in a package tailored to small business needs.
For whom is opening a Small Business the right choice?
The Small Business track is especially suited for those who want to reduce the tax burden when starting out, or those with limited business activity.
- Entrepreneurs starting out
- Students with a side activity
- Home-based business owners
- Small service providers
- Salaried employees with a side business
- Anyone wanting to lower the tax burden in the first years
Open a Small Business online with CPA Digital
At CPA Digital we centralized the entire Small Business registration process into one organized and simple system. You do not need to understand all the nuances of the track — we take care of it for you.
Our team will guide you in choosing the right path and make sure registration is done quickly without missing a step. This way you can start operating with a significantly lower tax burden.