Trading through a limited company has great tax advantages (see our guide on getting paid by dividends) but comes with extra responsibilities and tax matters to get your head around. This post lists out the annual compliance jobs limited company directors need to complete to stay on the right side of HMRC and Companies House.
Below are the minimum requirements that all limited companies are required to adhere to. Bear in mind that companies registered for VAT or as employers have additional filing responsibilities.
1. Annual return
The annual return is a small document that has to be delivered to Companies House every year, normally around the anniversary of your incorporation.
It covers basic information like the name of the company, your accounting year end date (or reference date in company law language), company address and what you do.
It also requires a few trickier technical details like the number of shares held by the shareholders and the original cost of those shares.
If you want to find out when your next annual return is due you can easily see on Companies House’s WebCHeck system.
2. Annual accounts
Small companies are required to submit abbreviated accounts to Companies House every year. The abbreviated accounts comprise a balance sheet as at the companies year end date. This balance sheet summarises the assets and liabilities of the company at a particular moment in time.
There are lots of templates around for preparing the document itself but the hard part is working out what numbers enter on your balance sheet. In our, admittedly biased, view that’s where you need an accountant. Annual accounts need to be prepared carefully under UK accounting standards and unless you stay on top these it’s easy to make a mistake.
Abbreviated accounts need to be filed with Companies House nine months after your year end date. If you want to check the deadline for your company you can also find it on the WebCHeck service.
3. Company tax return
Companies are required to submit an annual corporate tax return to HMRC.
This takes the shape of a fairly unfriendly technical form. At it’s simplest it involves inputting annual profits and adjusting them for any assets bought over the year (and sometimes in previous years). At it’s most complicated you have to choose between a vast range of profit adjustments for all sorts of disallowable expenses (eg company incorporation costs) and tax allowances.
In most circumstances corporate tax returns are due a day later than the annual accounts (ie. 9 months and 1 day after year end).
How Caprica Online Accountants can help
As part of our limited company accounting packages Caprica Online Accountants take care of all the above forms for a fixed monthly fee, providing piece of mind for small business owners so they can focus on growing their business knowing a qualified Chartered Accountant is dealing with your accounts.