HMRC requires your Company Tax Return and full Company Accounts.
Deadline: 12 months after the end of the accounting period. If Corporation Tax is due, this is required to be paid to HMRC within nine months and one day after the accounting period.
Companies House only requires an abbreviated set of Annual Accounts (these will be made public on Companies House website).
Deadline: Nine months after your year end (within 21 months of your registration date if it’s your first return).
The following penalties will be charged to the company if you miss the deadlines.
Late filing penalties issued by HMRC
1 day £100
3 months £100
6 months HMRC will estimate your Corporation Tax bill and add a penalty of 10% the unpaid tax
12 months Another 10% of any unpaid tax
If your tax return is late three times in a row, the £100 penalties are increased to £500 each.
Late filing penalties issued by Companies House
Up to a month late £150
1 to 3 months late £375
3 to 6 months late £750
Over 6 months late £1,500
If you file late two years in a row penalties double
Here is a list of some of the common business expenses you may be able to claim through your business:
• Annual health check
• Bank charges
• Business insurance
• Capital allowances
• Childcare regulations
• Christmas annual events
• Company cars and vans
• Company formation
• Computer equipment and software
• Course fees
• Employers’ national insurance contributions
• Eye test
• Health insurance
• Hire purchase agreements
• Home office
• Incidental overnight expenses
• Mileage expenses
• Office rental
• Office supplies – stationary, postage and printing costs
• Parking spaces
• Pension contributions
• Professional indemnity insurance
• Professional memberships
• Public transport
• Subscriptions and professional fees – accountants, solicitors etc
• Training fees
For more information on claiming expenses through your business, please don’t hesitate to contact us.
The simple rule is that you should keep hard copies of any documents that you are required to sign. Includes the following documents:
- Share certificates
- Dividend vouchers and minutes
- The first minutes when the company was formed
As a director of a limited company, you are required to submit a Conformation Statement with Companies House once a year. The Confirmation Statement includes official company information such as the registered office address, company’s’ officers, business description and shareholdings.
Failure to file a Confirmation Statement can result in directors being fined personally in criminal courts, and companies being struck off the register.
You need to file your Confirmation Statement at least once a year, and within 14 days of its due date. The due date is normally a year after your incorporation or the date you last completed a Confirmation Statement. You must submit a Confirmation Statement even if the company is dormant.
If you’re a company director your earning may be a combination of a director salary and share dividends; your accountant can advise on the best way to reduce your overall tax liabilities.
Please note, bank payments for salaries and dividends should be kept separate.
If you’re a sole trader or partner of your business then you take your earnings as straight drawings from your business to your personal bank account.
You can declare and pay dividends whenever you like; however we would recommend doing this quarterly or monthly to reduce administration. However, you must ensure company profits for the year can cover your dividend payments. Ongoing management a/c’s are an essential business tool to give you this information.
Note – There is a small amount of administration. You must keep a record of all dividends declared together with dividend vouchers.
As long as your family member is carrying out a reasonable amount of work for their salary, then you can pay them as an employee. This would need to be done through the business’s payroll scheme.
To pay dividends your family member must be a shareholder of the company. Problems may occur if no or minimal work is carried out and the company is a “personal service company” (i.e. a contractor or freelancer). In this case it is advisable to contact us to discuss “income shifting” rules.
If a director withdraws funds from a company, which are not salary or dividends, then a loan is formed. This is ok and quite common for small companies, but must be seen as a short-term measure.
If the DLA exceeds £10,000 at any point in the financial year or a DLA exists at the company year end there may be further tax implications.
Declaring a dividend can be used to offset an overdrawn DLA (as long as the company profits are enough to pay the dividend).
We advise discussing any potential issues of a DLA with your accountant.
A business is not required to register for Vat unless turnover is or expected to exceed the Vat registration threshold.
A business can however voluntarily register; there may be circumstances when this is advisable. There are various Vat schemes that can be used by businesses, contact us for further advice.
IR35 is legislation that was brought in to stop workers who were employees of an organisation from resigning and providing the same services through a limited company; thereby benefiting from the significant tax advantages.
IR35 is aimed at contractors and freelancers and looks at the working practices for each contract they work on.
This is a complex area of tax law and if you require advice on this matter, please get in touch.