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