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Filing Limited Company Accounts: What You Need To Know

Accounting Mistakes

One of the main things we do is help business owners deal with their limited company accounts. Knowing what – and when the deadlines are for filing limited company accounts is the trick to helping the ‘legal bits’ of your business tick along seamlessly. Here is a brief roundup of what you need to file each year, and what might happen if you don’t.

Annual Accounts (to Companies House & HMRC)

These are the ‘full’ accounts that show you how the company has done in the year.

These work out the corporation tax you have to pay. Before these accounts can be filed, they must be produced to very specific accounting standards.

This ‘full’ set gets attached to the company’s tax return (see below) each year and is sent to HMRC.

There is an opportunity to get caught out when you’re filing limited company accounts, in that this is due to be submitted to Companies House 9 months after the company year-end. Directors often get caught out in the first year as its 21 months from registration, so is usually a slightly shorter deadline in year one.

Helpfully, your company’s registration on company’s house will also show you the due date for your accounts. 

You usually prepare a separate ‘filleted’ (previously known as ‘abbreviated’ ) set of accounts for Companies House, as these are publicly visible to anyone. This set doesn’t show you turnover, profits etc., just the overall ‘position’ of the business (useful for banks, lenders etc). 

Nearly all limited companies have accountants, as there are very limited free software (at time of writing) to help produce the accounts. They have to be ‘electronically tagged’ to be transmitted in a specific way to HM Revenue & Customs. This software (and the know-how) sits with accountants. 

Like all returns, there are penalties for not submitting your accounts to Companies House. You can expect them to range from £100 – £1500, but if you’ve been late before, they double. 

Ultimately, if you do not submit the accounts, you can also end up in court, so be sure to check the dates.

Corporation Tax Return (to HMRC)

With the full accounts in hand, you need to complete a corporation tax return that tells you and HM Revenue & Customs what tax to pay on the profits. This return is sent along with the full accounts. It is also ‘electronically tagged’ and sent via a specific electronic software system to HMRC. The deadline for the tax return is actually 12 months after the year-end. This may feel odd as the Companies House accounts are due at 9 months. Any tax payable is due at 9 months & One Day after the year-end – before the return is actually due!

It is worth being extra careful on the first-year tax return. It is very common for dates to not line up correctly, and possible that two returns need to be done. As you would expect, there are penalties for late filing, starting at £100. If you need support with filing limited company accounts, then contact us as, we’d be glad to help.

How often can you pay dividends from your limited company?

For a new small business owner, how to access the funds you need to live on yourself is a crucial question!

One of the primary ways you can take money from a limited company is via dividends. This basically a payment to you of the profit (or part of it), from your business, after tax and adjustments.

So, how often can I take a dividend?

The short answer:

As often as you want really!

BUT

There are some things you’ve got to get right to do so.

The slightly longer answer:

There is a general myth about dividend payments. This dates back to when companies would often only declare ‘final’ dividends at a company’s Annual General Meeting. Indeed, some ‘Articles of Association’ (the document that governs certain legal procedures around the company) might have even required this to be the case.

However, times have changed. Most small limited company owners will instead take regular ‘Interim Dividends’.

 Interim Dividends and the law

To make these dividends legal, you still need to take certain steps including:

· To ‘declare’ the dividends

· To keep specific records

in the meantime, here’s a quick check list. You need:

· Proof that you had the profits to pay out (usually company accounts or a current Balance Sheet)

· Meeting minutes declaring the dividend

· An entry in your records / book-keeping software

· Production of a Dividend voucher is recommended

At this point you would usually take the money, although you don’t have to. It could instead be marked in your ‘Director’s loan account’ for payment later, for example.

A few final words on dividend payments

Dividends can be a really useful tool for tax-efficiently extracting money for a limited company.

However, they can also be technically challenging, and planning for the potential personal tax bill on them can cause a major headache.

To help put yourself in the best position with this, check out the following:

· Do I need to pay tax on dividends?

· How to plan for your ‘dividend tax’ bill

You can also ask your accountant. Or you can book a paid 1 hour, 1-2-1 consultation with us so you can ask simple questions, and then go on to divvy out the dividends with more confidence yourself. It’s a great way for you to get the help you need, when you need it.

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Filing Accounts with HMRC

In addition to submitting accounts to Companies House, limited companies must file a Company Tax Return (CT600) accompanied by full statutory accounts to HMRC. This submission calculates the Corporation Tax owed based on the company’s profits. The deadline for filing the Company Tax Return is 12 months after the end of the accounting period it covers. However, any Corporation Tax due must be paid within 9 months and one day after the end of that period.

Joint Filing Options

To streamline the process, companies that do not require an auditor can file their accounts and Company Tax Return simultaneously using HMRC’s online service. This integrated approach ensures that both HMRC and Companies House receive the necessary documents, reducing administrative effort.

Consequences of Non-Compliance

Failure to file accounts or pay Corporation Tax on time can lead to significant penalties. Companies House imposes fines starting from £150 for late accounts, increasing with the length of the delay. HMRC may also levy penalties and interest for late tax returns or payments. Persistent non-compliance can result in the company being struck off the register or directors facing personal liability

Frequently Asked Questions (FAQs) about Filing Limited Company Accounts

1. Can I prepare and file my own limited company accounts?

Yes, company directors can prepare and file their own accounts. However, many opt to hire professional accountants to ensure accuracy and compliance with the latest regulations. Even with professional assistance, directors remain legally responsible for the company’s filings.

2. What records must a limited company maintain?

A limited company is required to keep accurate financial records, including details of all income and expenditure, assets and liabilities, and records of all goods bought and sold. These records support the information submitted in the annual accounts and tax returns.

3. What happens if I miss the filing deadline?

Missing the filing deadline for accounts or tax returns results in automatic penalties. The longer the delay, the higher the penalty. For example, late filing of accounts with Companies House can incur penalties starting from £150, escalating if the delay continues. Similarly, HMRC imposes fines and may charge interest on any unpaid tax.

4. Do dormant companies need to file accounts?

Yes, even if a company is dormant (not trading), it must file dormant accounts with Companies House annually and inform HMRC of its dormant status to avoid unnecessary tax filings.

5. Can I change my company’s accounting reference date?

Yes, a company can change its accounting reference date, which alters its financial year-end. This can be done by notifying Companies House and is often used to align the company’s financial year with the calendar year or the financial periods of parent companies.

For detailed guidance and access to online filing services, visit the official GOV.UK website

Categories
Blogs

Key 7 Numbers that are vital in your business

Key 7 Numbers that are vital in your business

Do you feel in the dark about your business’s numbers?
Many small business owners feel there is a real lack of data available to them. This is usually due to a combination of:
a) not knowing what numbers are important (and why)
and
b) not having a system to produce them regularly
So, here’s your business owner’s guide to 7 of the most impactful numbers you could know about your business. Once you know them, they can give you some real insight into what’s happening in the business, and help you understand how to push the business forward.
Some of these numbers you will easily be able to pull from your records, and some might need a more detailed calculation. We don’t cover the detail of the calculation here. Right now, we just want you to be aware what key numbers you should be looking at are, and why they are important.
Know your numbers
First, we’ll talk you through you the ‘Big 3’ key numbers that most owners need a handle on. Then we’ll explore “4 More” that really help you get under the bonnet of the business.

THE BIG 3
1. Revenue
The obvious first number to understand is how much you are selling. Call it ‘sales’, ‘revenue’ or ‘turnover’ – it’s all the same thing.
Knowing this number, and whether it is growing or decreasing will give you a key indication of whether the business is going in the right direction.
It’s not the only number that matters, but it’s a pretty important one!
2. Gross Profit Margin
This one is MASSIVE. The power in knowing this number and actively trying to improve it can change your business, and ultimately your life as an owner.
Your gross profit margin tells you what profit would be left after you pay for your ‘direct’ costs for every £ of revenue you generate. This number is normally a % figure.
For example, if you make a product, it’s usually the profit after you’ve paid for the materials to make it, package it, delivery, etc.
Your gross profit margin shows you how profitable your main business activities are, before considering your fixed costs (overheads)..

3. Net Profit and ‘EBITDA’
Some would argue that Net Profit is actually all that matters. It’s the profit (if any!) that’s left at the end when all other costs have been taken into consideration.
One key version of this number is something known as ‘EBITDA’. This is the profit, but with some of the more ‘unusual’ costs that are normally found in accounts stripped out.
EBITDA means:
Earnings (profit) Before Interest, Tax, Depreciation and Amortization (another form of depreciation).
The best way to use your EBITDA figure is as a percentage of your revenue. This will then in theory tell you, for any given £ revenue figure, what profit is left at the end. So, if you have an EBITDA of, say 35%, then for every £100 you make, £35 as Profit.
It’s very important to keep tracking this figure, so you are also keeping an eye on the direction the business is heading in.

4 MORE
4. Revenue per employee
This number is how much revenue (sales) you produce per employee in the business. This number is impacted by many elements of your business including:

⦁ Efficiency
⦁ Employee costs (holidays, pension plans, etc)
⦁ Training
⦁ Tech and Equipment
⦁ HR and Recruitment
As a result, this number is more of a holistic look at the business and how efficient the team is. If you concentrate on improving this number, you often find many others are positively impacted.
5. Cash Days
Your Cash Days number can also be called ‘working capital days’. It is a measure that gives you a snapshot of how long it takes for money to go through your business.
Your Cash Days calculation combines:

⦁ How long it takes for your customers to pay you
⦁ How long it takes for you to pay your suppliers
⦁ How long it takes for your stock to be turned into cash
⦁ How long it takes any ‘work in progress’ to be turned into cash
Improving this figure (making it lower) can really help improve the cash in your business at any given time. This is particularly important in times of financial stress or market worries.
6. Core Cash Target
This number looks at the ideal amount of cash your business should keep on hand before starting investments or paying profits out.
Depending how you calculate this, it’s usually a number that includes:

⦁ Your total taxes due
⦁ An amount for your fixed overheads
It gives you an idea of what you really need to hold back in reserve before committing funds to other projects or put in your pocket as the owner!
7. Business Return
This number is another indicator of how your business is progressing overall. It is normally calculated by looking at:
⦁ Your net profit over a year
vs
⦁ The overall ‘value’ of your business
You could look at this number as ‘Is the business producing a good enough return?’. For example, would you get more if you just closed the business now, cashed in and stuck the money in a bank?

Summary
And there we have it, 7 key numbers you should know about your business.
If you don’t know them, or are not sure how to find them, we have a range of business advisory services that build in these key numbers at their core.
Our business advisory service includes monthly meetings to:
⦁ Review these numbers
⦁ Understand what’s happening
⦁ Help you set an action plan to move the numbers and push your business forward
Want to know your numbers? Call this number 07877284111– and ask about our business advisory services. We’re here to help.

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Blogs Guides Taxation Services

Taxation Services for Efficient Tax Planning and Compliance in the UK

In the complex world of UK taxation, navigating the intricate maze of laws and regulations can feel like attempting to solve a puzzle without all the pieces. For landlords, property investors, and SMEs, effective tax planning isn’t just a luxury—it’s a necessity for growth and sustainability. Our expert taxation services are designed to simplify this journey, helping you minimize liabilities while staying fully compliant with UK tax laws.

Understanding the Importance of Strategic Tax Planning

Imagine Emma, a budding property investor who recently acquired several rental properties across the UK. Excited about her new venture, she soon found herself overwhelmed by the complexities of property taxes, VAT obligations, and self-assessment returns. Without proper guidance, Emma risked overpaying taxes and facing penalties for non-compliance.

Emma’s story isn’t unique. Many businesses and investors miss out on opportunities to save money simply because they aren’t aware of the tax reliefs and strategies available to them. This is where our tax planning for property investors UK comes into play, turning confusion into clarity.

Our Comprehensive Taxation Services

Tailored Tax Planning for Property Investors

Property investment can be a rewarding yet challenging field. Our services help you:

  • Maximize Deductions: Identifying allowable expenses to reduce taxable income.
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  • Leverage Tax Reliefs: Utilizing schemes and incentives specific to property investors.5 Must-Know Tax Tips for Every Small Business Owner

Business Tax Compliance UK

For SMEs, staying compliant with ever-changing tax laws is crucial. We provide:

  • Corporation Tax Services UK: Ensuring accurate calculations and timely submissions.
  • VAT Services UK: Managing VAT registrations, returns, and planning.
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Specialized Tax Relief Strategies UK

Every pound saved in taxes is a pound that can be reinvested into your business. Our experts:

  • Identify Opportunities: Exploring R&D credits, allowances, and other reliefs.
  • Plan Ahead: Implementing strategies that align with your long-term goals.
  • Stay Updated: Keeping abreast of legislative changes that impact your tax position.

Navigating the Complexities of UK Tax Laws

The UK’s tax system is one of the most intricate globally. According to HM Revenue & Customs (HMRC), errors in tax filings cost UK businesses millions of pounds annually in penalties and lost opportunities. Our role as your HMRC liaison is to bridge the gap between you and the tax authorities, ensuring transparency and compliance.

Capital Gains and Inheritance Tax Planning UK

Protecting your wealth for future generations is essential. We offer:

  • Inheritance Tax Planning UK: Structuring your assets to minimize inheritance tax liabilities.
  • Capital Gains Tax Advice UK: Advising on the disposal of assets to reduce capital gains tax.

Real-Life Impact: A Success Story

Consider John, an SME owner who felt the weight of increasing tax bills year after year. Unaware of the available reliefs, he was overpaying by thousands of pounds. After engaging our services, we conducted a thorough review and implemented tailored strategies. The result?

  • Significant Tax Savings: We reduced John’s tax liability by 25% in the first year.
  • Peace of Mind: With our ongoing support, John now focuses on growing his business without worrying about compliance issues.

“I never realized how much I was leaving on the table until they stepped in. Their expertise in business tax compliance UK transformed my finances.” — John, SME Owner

The Value We Bring to Your Business

Expert Guidance and Support

Tax laws don’t stand still, and neither do we. Our team stays ahead of legislative changes to provide you with:

  • Up-to-Date Advice: Ensuring your strategies are compliant and effective.
  • Proactive Planning: Anticipating changes that could impact your tax position.

Comprehensive HMRC Liaison

Dealing with HMRC can be daunting. We act as your representative, handling:

  • Communications: Responding to inquiries and submitting required documentation.
  • Tax Audit Support UK: Assisting during HMRC audits to protect your interests.

Addressing Common Challenges

Overcoming the Fear of Audits

The word “audit” often strikes fear into business owners. With our tax audit support UK, we:

  • Prepare Thoroughly: Ensuring all records are accurate and compliant.
  • Advocate for You: Representing your case professionally to HMRC.

Balancing Compliance with Tax Efficiency

Some worry that aggressive tax planning might lead to compliance issues. We prioritize:

  • Ethical Practices: Employing legitimate strategies within the law.
  • Transparent Communication: Keeping you informed every step of the way.

Insights from Industry Experts

Tax expert and author Jane Smith notes:

“Effective tax planning is not about dodging taxes but about understanding the law to make informed decisions that benefit both the taxpayer and the economy.”

Our philosophy aligns with this perspective, focusing on sustainable strategies that stand up to scrutiny.

Taking the Next Step Towards Financial Empowerment

Imagine redirecting significant tax savings back into your business or investments. With our taxation services, this vision becomes a reality.

Personalized Consultations

We begin with understanding your unique situation:

  • In-Depth Analysis: Reviewing your financial landscape.
  • Customized Strategies: Crafting plans that align with your goals.

Ongoing Support

Our relationship doesn’t end after implementation:

  • Regular Reviews: Adjusting strategies as your circumstances change.
  • Accessible Expertise: We’re just a call or email away whenever you need us.

Conclusion

Navigating the UK’s tax landscape doesn’t have to be an uphill battle. With the right partner, you can turn tax compliance from a source of stress into an opportunity for growth. Let us guide you towards greater financial efficiency and peace of mind.

Contact Us Today

Ready to unlock the full potential of your finances? Get in touch to discover how our taxation services can make a difference.

Frequently Asked Questions

What is involved in tax planning for property investors UK?

Answer: Tax planning for property investors in the UK involves strategies to minimize tax liabilities related to rental income, property sales, and inheritance. This includes leveraging allowable expenses, understanding capital gains tax implications, and planning for inheritance tax.

How can business tax compliance UK benefit my SME?

Answer: Ensuring business tax compliance helps avoid penalties, reduces the risk of audits, and can uncover opportunities for tax savings. It involves adhering to all relevant tax laws, timely filings, and accurate reporting.

Why are self-assessment tax returns UK important?

Answer: Self-assessment tax returns are required for individuals with income not taxed at source. Accurate completion ensures you pay the correct amount of tax and avoid penalties for late or incorrect submissions.

What services are included in corporation tax services UK?

Answer: Corporation tax services include calculating your company’s tax liability, preparing and filing tax returns, advising on payment deadlines, and implementing strategies to minimize tax through allowances and reliefs.

How do VAT services UK support my business?

Answer: VAT services assist with registration, preparing and submitting VAT returns, advising on VAT schemes, and ensuring compliance with VAT regulations to avoid penalties.

What is capital gains tax advice UK?

Answer: Capital gains tax advice involves strategies to reduce the tax payable when disposing of assets like property or shares. This includes timing disposals, using allowances, and considering reliefs.

How can tax relief strategies UK help my business?

Answer: Tax relief strategies involve identifying and utilizing reliefs and allowances to reduce taxable income. This can include R&D credits, investment allowances, and reliefs specific to certain industries or activities.

Why is inheritance tax planning UK important?

Answer: Inheritance tax planning helps you structure your estate to minimize the tax burden on your heirs. This can involve gifts, trusts, and other mechanisms to efficiently transfer wealth.

What role does HMRC liaison play in taxation services?

Answer: Acting as your HMRC liaison, we handle all communications with the tax authority, respond to inquiries, submit required documents, and represent you during audits, ensuring compliance and reducing stress.

How does tax audit support UK assist during an HMRC audit?

Answer: Tax audit support provides guidance and representation during an HMRC audit. We help prepare necessary documentation, address queries, and work to resolve issues efficiently, protecting your interests.

Let us be your trusted partner in navigating the complexities of UK taxation, turning challenges into opportunities for growth and success.