When you set up a limited company \u2013 whether you were aware of it or not \u2013 as a director you took on a wide range of legal responsibilities, many linked to tax, accounting and financial record keeping. So, what are some of those key responsibilities and what do you do to ensure compliance?<\/p>\n
Every company, whether trading or not, must file a Confirmation Statement. It\u2019s a snapshot of information about the company at a point in time, for example, details of its shareholders and directors. This is often confused with the company accounts, but it\u2019s very<\/em> different.<\/p>\n Filing the Confirmation Statement ensures that the data held by Companies House about your company is current. It must be filed at least once a year at Companies House, with a fee of \u00a313 payable if filed online. The Confirmation Statement is easy to file, you can visit government website gov.uk<\/a> to find out how to do it. You can also watch a short video about Confirmation Statements<\/a>.<\/p>\n Your accounting date is also known as your year-end date or accounting reference date. It\u2019s the date up to which your accounts are prepared and is generally the end of a calendar month, for example, 31 December or 31 March.<\/p>\n Companies House will have allocated your limited company\u2019s year-end when it was registered (\u201cincorporated\u201d). The year-end will be the end of the month in which the company was set up. So, for example, if the company was set up on 5 March 2019, the year-end will be 31 March and the first accounts will be prepared up to 31 March 2020.<\/p>\n HMRC won\u2019t know this date, because Companies House and HMRC don\u2019t work in tandem. So, you also must tell HMRC your company year-end date. Should you wish, it can be changed via the Companies House online service<\/a> or you can download the AA01 form<\/a>, complete it and post it to Companies House, but doing it online is quicker.<\/p>\n Your company is likely to have a different year-end to the tax year-end, which is 5 April. That\u2019s fine, but there are deadlines for both the company year-end and the tax year-end.<\/p>\n Although Companies House only requires an extract of the accounts \u2013 which may look easy to prepare \u2013 HMRC needs a full<\/em> set of accounts, including a detailed profit and loss account and directors\u2019 report. In any case, you\u2019ll need to compile a full set of accounts before you can produce an extract for Companies House.<\/p>\n Companies House and HMRC are very<\/em> different government organisations and they don\u2019t<\/em> work together. So, do not assume that just because you\u2019ve filed something with one that the other will automatically get it, too.<\/p>\n And accounts must be in a specified format; they\u2019re usually produced from software that ensures this. You can\u2019t just pop a set of accounts together in Word.<\/p>\n <\/b>As well as a full set of accounts, HMRC will require a completed CT600 company tax return form. This is not a straightforward form. So, unless you have experience, it\u2019s best left to accounting professionals to complete.<\/p>\n Your Corporation Tax must be paid within nine months and one day of the end of your accounting period (as previously stated). Don\u2019t forget to enter the amount due into your accounting software, recording it as a creditor in the annual accounts.<\/p>\n <\/b>Company directors with income that hasn\u2019t been taxed elsewhere should complete a Self-Assessment tax return, detailing all<\/em> of their income from every<\/em> source \u2013 not just from the company.<\/p>\n Businesses that employ staff whose wages exceed the Lower Earnings Limit<\/a> have numerous reporting requirements, but in particular, they must file monthly Real Time Information (RTI) returns. Otherwise, they risk HMRC imposing a fine of \u00a3100 for each month missed.<\/p>\n As an employer, you must issue P60s<\/a> each year to employees, as well as a P45<\/a> to a departing member of staff.<\/p>\n <\/b>Late filing of any of the above returns can result in a fine, penalties and interest. In the case of your accounts, both Companies House and<\/em> HMRC can fine your company. The fines start at \u00a3100 from HMRC and \u00a3150 from Companies House and increase from there up to a possible criminal conviction for significant late filing.<\/p>\n If you stop trading, you must file dormant accounts each year. If you decide to close the company down, there is even a long-winded process to follow for that. Advice from an experienced accountant can, of course, make both requirements quicker, cheaper and less stressful, giving you peace of mind that all necessary things have been done in the right way.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" When you set up a limited company \u2013 whether you were aware of it or not \u2013 as a director you took on a wide range of legal responsibilities, many linked to tax, accounting and…<\/p>\n","protected":false},"author":1,"featured_media":12910,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1067,1033],"tags":[],"class_list":["post-12906","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-to-review","category-1-about-accounts-and-tax"],"_links":{"self":[{"href":"https:\/\/www.cheapaccounting.co.uk\/blog\/index.php\/wp-json\/wp\/v2\/posts\/12906","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.cheapaccounting.co.uk\/blog\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cheapaccounting.co.uk\/blog\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cheapaccounting.co.uk\/blog\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cheapaccounting.co.uk\/blog\/index.php\/wp-json\/wp\/v2\/comments?post=12906"}],"version-history":[{"count":1,"href":"https:\/\/www.cheapaccounting.co.uk\/blog\/index.php\/wp-json\/wp\/v2\/posts\/12906\/revisions"}],"predecessor-version":[{"id":12908,"href":"https:\/\/www.cheapaccounting.co.uk\/blog\/index.php\/wp-json\/wp\/v2\/posts\/12906\/revisions\/12908"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.cheapaccounting.co.uk\/blog\/index.php\/wp-json\/wp\/v2\/media\/12910"}],"wp:attachment":[{"href":"https:\/\/www.cheapaccounting.co.uk\/blog\/index.php\/wp-json\/wp\/v2\/media?parent=12906"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cheapaccounting.co.uk\/blog\/index.php\/wp-json\/wp\/v2\/categories?post=12906"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cheapaccounting.co.uk\/blog\/index.php\/wp-json\/wp\/v2\/tags?post=12906"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}2 Year-end or accounting reference period<\/strong><\/span><\/h4>\n
3 Tax year<\/span> <\/strong><\/h4>\n
4 Filing and payment deadlines<\/strong><\/span><\/h4>\n
\n
5 Annual accounts<\/strong><\/span><\/h4>\n
6 CT 600 Corporation Tax return<\/b><\/span><\/h4>\n
7 Paying Corporation Tax<\/strong><\/span><\/h4>\n
8 Self-Assessment tax return<\/b><\/span><\/h4>\n
9 PAYE Real Time Information returns<\/strong><\/span><\/h4>\n
10 Late filing<\/b><\/span><\/h4>\n
11 Dormant accounts and closing the company<\/strong><\/span><\/h4>\n