As a limited company director you are legally responsible for filing accounts, tax returns and other company documents. In the article I will set out what these documents are and the deadlines for filing.
Confirmation that the limited company information held by Companies House is correct. This is required on a yearly basis. Any changes to company information must be declared, this can include changes to;
- Directors and Secretary.
- People with Significant Control (PSC).
- Companies Registered Office Address.
- Standard Industrial Classification (SIC) Code.
- Statement of Capital.
- Trading Status of Shares.
- Exemption from keeping a PSC Register.
- Shareholder Information.
Limited Company Statutory Accounts
A set of accounts are required to be submitted to Companies House each year in accordance with the companies act 2006. The financial statements include company information, an accountants report, an income statement (profit and loss account) and a statement of financial position (balance sheet).
Statutory accounts can cover more than a 12 month period and are due nine months after your companies year end date. For most limited companies with a turnover of less than £10.2 million per annum statutory accounts are prepared in accordance with Financial Reporting Standards (FRS) 102 or 105.
Corporation Tax Return (CT600)
If your company reports a profit for the tax year then it is likely you will need to pay Corporation Tax to HMRC. Even if the company doesn't report a profit a corporation tax return is still required. Losses can be rolled forward to the following tax year so it is important this is reported.
Profit for corporation tax is different to the profit shown on your companies income statement (profit and loss account) as part of the statutory accounts - for example the purchase, depreciation, disposal and sale of assets are accounted for differently on the corporation tax return.
Unlike statutory accounts corporation tax returns can only cover a 12 month period. It is therefore likely that your company will be required to submit two corporation tax returns to cover the first financial year of trading.
Director(s) Self Assessment Tax Return(s)
A personal "self assessment" tax return to HMRC is required on an annual basis for all company directors. The self assessment tax return records any dividends received, gross pay and tax paid as part of PAYE as well as any other income including pension income and rental income received.
You can find more information here - www.matrix-accounts.com/blog/592042_self-assessment-tax-returns-for-limited-company-directors-an-overview
The following returns are not required for all companies and are dependant on the nature of the business;
- VAT Return - mandatory for companies with a turnover of more than £85,000 per annum (calculated on a rolling 12 month basis). VAT is levied on sales by the business - the rate of VAT will depending on the goods or services sold and can vary from 0% to 20%. Sales VAT is offset by VAT reclaimed on purchases with the net amount paid to HMRC, usually on a quarterly basis. For businesses trading outside of the UK it is important to notify HMRC of any "imports and exports" as part of the VAT return. More information on import and export VAT can be found here - www.matrix-accounts.com/blog/570566_how-does-brexit-impact-vat-accounting
- PAYE Returns - this is a requirement for all companies with employees (including directors payroll). The company must be registered with HMRC for PAYE with a "full payment submission" FPS required to be submitted to HMRC for each pay period. The FPS reports any income tax as well as employers and employees national insurance deducted from employees pay in addition to changes to employee information. Following the FPS a PAYE payment is made by the company to HMRC. Other documents generated as part of PAYE include the P60 and P45 (showing a summary of an employees income and tax paid for the tax year) and P11D (summarising the value of expenses and benefits provided to directors and employees).
- CIS Returns - applies to contractors in the building industry that sub-contract work. More information can be found here - www.matrix-accounts.com/blog/460287_cis-construction-industry-scheme-for-contractors-and-sub-contractors-faqs
- Employment Related Securities (ERS) Returns - reports to HMRC the transfer of shares to employees or directors. ERS schemes can include; Share Incentive Plans (SIP), Save as You Earn (SAYE), Company Share Option Plans (CSOP).
For further advice and information including the topics covered in this article please get in touch and I will be happy to answer any questions you may have.
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This article was written by Will Farmer MAAT, AAT Licensed Accountant and Director of Matrix Accountancy Services Limited.