A chart of accounts (COA) is a structured list of accounts used to categorize all financial transactions of a business. In the UK, the structure should align with local accounting practices and guidelines, such as those outlined by HMRC. Below is an example of a typical chart of accounts for a small-to-medium business in the UK:

Example Chart of Accounts for a UK Business

Assets (1xxx)

1. Current Assets
   • 1000: Bank Account - Current
   • 1010: Bank Account - Savings
   • 1020: Petty Cash
   • 1030: Accounts Receivable (Debtors)
   • 1040: Inventory
   • 1050: Prepaid Expenses
   • 1060: VAT Input Tax (Recoverable VAT on Purchases)
2. Fixed Assets
   • 1100: Office Equipment
   • 1110: Furniture and Fixtures
   • 1120: Vehicles
   • 1130: Computers
   • 1140: Buildings
   • 1150: Accumulated Depreciation
3. Intangible Assets
   • 1200: Goodwill
   • 1210: Trademarks/Patents

Liabilities (2xxx)

1. Current Liabilities
   • 2000: Accounts Payable (Creditors)
   • 2010: VAT Output Tax (VAT Collected on Sales)
   • 2020: Accrued Expenses
   • 2030: Payroll Liabilities (PAYE/NIC Contributions)
   • 2040: Income Tax Payable
   • 2050: Deferred Revenue (Advanced Payments)
2. Long-term Liabilities
   • 2100: Business Loans
   • 2110: Lease Obligations

Equity (3xxx)

• 3000: Owner's Equity/Capital
• 3010: Retained Earnings
• 3020: Dividends Paid

Income/Revenue (4xxx)

1. Sales Revenue
   • 4000: Product Sales
   • 4010: Service Income
   • 4020: Discounts Given
2. Other Income
   • 4100: Interest Income
   • 4110: Rental Income
   • 4120: Miscellaneous Income

Expenses (5xxx to 7xxx)

1. Cost of Goods Sold (COGS)
   • 5000: Materials Purchased
   • 5010: Manufacturing Costs
   • 5020: Direct Labour
2. Operating Expenses
   • 6000: Rent
   • 6010: Utilities
   • 6020: Salaries and Wages
   • 6030: Marketing/Advertising
   • 6040: Travel and Entertainment
   • 6050: Office Supplies
   • 6060: Depreciation Expense
   • 6070: Software and Subscriptions
   • 6080: Insurance
3. Finance Expenses
   • 7000: Bank Charges
   • 7010: Loan Interest
   • 7020: Foreign Exchange Losses
   • 7030: Penalties and Fines

Tips for Customizing Your Chart of Accounts

1. Align with Your Business Needs:
   • If you're running a SaaS business, you may want categories for Subscription Revenue or Cloud Hosting Expenses.
   • For a product-based business, include Warehouse Costs and Shipping Expenses.
2. Numbering System:
   • Use a consistent numbering scheme to allow for future growth (e.g., leave gaps between numbers for adding new accounts).
3. Compliance:
   • Ensure your COA aligns with UK-specific tax and reporting requirements, such as VAT categorization.
4. Use Accounting Software:
   • Tools like Xero, QuickBooks, or Sage come with built-in UK-specific COA templates that you can customize.