A private limited company must prepare the following after the end of its financial year. Annual accounts a Company Tax Return You need your accounts and tax return to meet deadlines for filing with Companies House and HMRC. The first set of accounts must be filed with Companies House within 21 months after the date…
Each and every Limited company need to check that the information Companies House has about the company is correct every year. This is called a confirmation statement (previously called an annual return). Companies need to check the following information: the details of the registered office, directors, secretary and the address where the records are kept…
All business will need to keep a record of people with significant control and file details with Companies House. The legislation impacts incorporated companies limited by shares, companies limited by guarantee, unlimited companies, and limited liability partnerships, which will be required to keep a people with significant control (PSC) register from 6 April 2016 and file…
Class 1 (Employees and Employers) Summary of Class 1 NICs Class 2 & 4 (Self-employed) Summary of Class 2 & 4 NICs
A spouse/civil partner can elect to transfer £1,250 (a fixed amount in 2019-20) of their Personal allowance (PA) to their partner. The MA is available provided neither spouse/civil partner is a higher or additional rate taxpayer. The effect of the election is: The transferor’s PA is reduced by £1,250. The recipient’s income tax liability is…
All individual receive a PA every tax year. For 2019-20 the Personal allowance is £12,500 This is set against income, generally vs. non-savings income, then vs. savings income and then vs. dividend income. Any unused PA cannot be carried forward to the next tax year. PA is reduced by £1 for every £2 of income…
Non-Savings income All employment income, Trading income (self-employment, partnership) and property income fall in this category. For the tax year 2019-20, The first £37,500 (basic rate band) of taxable income is taxed at 20%. Excess income up to £150,000 is taxed at 40% (higher rate band) Income over £150,000 is taxed at 45% (additional rate…
Losses can sometimes be used to reduce the corporation tax bill. However, their use is subject to strict rules, to prevent tax evasion. Trading losses can be offset against other profits made in the same accounting period Trading losses can also be carried back against profits made in the preceding accounting period. To do this…
Companies are responsible for assessing their own liability to corporation tax and for ensuring that all the money which is due is paid on time. Most companies have to pay within nine months and one day of the end of their accounting period This rule applies to small and medium-sized companies (ie those with profits…
From April 2017 the single rate of corporation tax is 19% on all profits, reducing to 17% by 2020. Businesses with profits that can be attributed to patented inventions and certain other intellectual property can elect to pay a reduced rate of 10% tax on those profits. See ‘Minimising the tax bill’. For the financial years…
If your business is a company, you need to submit corporation tax returns and pay corporation tax on your profits. Although you are likely to use accountants to prepare your returns and calculate your tax liability, you cannot afford to ignore corporation tax until the year end. The way you finance and manage your business…
Be careful if your business is doing something out of the ordinary Stepping outside your normal accounting system creates the potential for costly errors – for example, if you decide to: buy, sell, let, sub-let or develop property agree a special discount or rebate with a customer or supplier that is documented manually or outside…
Various accounting schemes are available to reduce the amount of administration for smaller businesses. Whichever scheme is used, the net amount of VAT collected is intended to be broadly the same. Apart from retailers, most small businesses use the cash accounting system You account for VAT on the basis of the date cash is received…
VAT is generally paid to HMRC on the basis of quarterly VAT periods Administration can be made easier by asking HMRC for VAT periods that fit in with your accounting year. If your turnover exceeds the VAT registration limit (currently £85,000), the new HMRC initiative Making Tax Digital (MTD) will apply to you from 1…
To claim back input VAT, a VAT invoice must be held Special rules apply to fuel for cars If a car is used exclusively for business purposes, you can reclaim input VAT on fuel in the normal way. Otherwise, you can opt either to reclaim VAT only on fuel used for business purposes, or to…
Apply to HMRC as soon as VAT registration is required You are liable to pay HMRC the output VAT due on all supplies you make from the date you are required to register, rather than when registration is complete. Adjust your pricing at the same time While the application is processed, your pricing should reflect…
Should you register? The advantage of registering is that a business can reclaim VAT paid on business purchases. But if a business mainly deals with members of the public and it begins adding 20% VAT to its prices, it may lose customers. A business must register if VATable sales reach the registration threshold You must…
VAT While VAT creates additional paperwork, it can also reduce your costs by allowing you to reclaim the VAT you pay on your business purchases. Many businesses have no choice but to register for VAT once their sales reach £85,000 a year. You need to understand whether you can or should register for VAT, and…