A limited company is a business structure that operates as a separate legal entity from its owners. Therefore, the owners enjoy limited liability protection, wherein their personal assets remain safeguarded against the company’s debts. Accordingly, this blog will give you a comprehensive guide to all the significant filing obligations for a limited company in the UK. Thus, you can stay compliant with HMRC and avoid unnecessary complications.
To discover more about a limited company, read our respective guides:
How to set up a limited company?
Limited company advantages and disadvantages.
However, alongside the benefits, there are various filing obligations for a limited company to stay compliant with Companies House and HMRC.
The filing obligations for a limited company
There are several filing obligations for a limited company to fulfil for both Companies House and HMRC. Thus, being the company’s owner and a director, you are legally responsible for completing the filing and reporting requirements, including:
Submitting the registration documents:
First and foremost, upon the incorporation of a limited company with Companies House, key documents, like Memorandum of Association and Articles of Association must be submitted.
It is worth highlighting that these documents establish your company’s legal foundation and outline how it will be governed.
Preparing and filing annual accounts:
Next, completing annual financial accounts for Companies House is another significant requirement among the filing obligations for a limited company in the UK. These accounts are submitted on an annual basis.
Remember that all companies, dormant or trading, are required to prepare and submit annual accounts. Nevertheless, unlike a dormant company, an active company must also submit its accounts to HMRC alongside Companies House.
Further elaborating, the main objective of annual accounts is to report the cash flows or economic activity of your limited company to HMRC when its financial year concludes.
Moreover, what accounts you must prepare and file depends on the size or operational status of your company. To illustrate,
If your limited company is larger, it must complete full statutory accounts. The entire statutory accounts should contain the following:
- Profit and Loss Account
- Balance Sheet
- Directors’ Report
- Auditors’ report, unless a company qualifies for exemption.
- Account notes.
For small limited companies, small accounts, such as simplified and abridged accounts, are prepared.
Start-ups (companies created from scratch) must prepare basic accounts, which are more straightforward and simplified than small company accounts.
Lastly, dormant companies also prepare basic and straightforward accounts.
Further, after incorporation of the limited company, Companies House will provide you with an accounting reference date (ARD). It is the date on which your annual accounts should be prepared, meaning it shows the end of your company’s financial year.
Beyond that, to avoid potential penalties, However, a company can change (shorten or extend) its accounting reference date. As a result, its accounting period becomes shorter than the typical 12 months, or it becomes extended. Nonetheless, there are more limitations on prolonging the accounting period.
For additional information, the ARD generally falls on the last day of the month of incorporation. For example, if you register your company on 1 January, your ARD will be 31 January the subsequent year.
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Filing confirmation statement:
The confirmation statement, formerly known as the annual return, contains general information about the company. It is essential in meeting the filing obligations for a limited company. Moreover, it is prepared annually and filed at Companies House once a year.
For greater clarity, the prime purpose of confirmation is to contain accurate and up-to-date information about the company on the public register, including:
- The company’s registered office address;
- Any Single Alternative Inspection Location (SAIL) location;
- The address of statutory records if the company uses a SAIL;
- Main economic activities, which are provided as SIC codes;
- Names, addresses, personal information of directors. It also includes their residential addresses;
- The details of the company’s secretary, if appointed;
- Details of People with Significant Control (PSC) and what control they wield over the company;
- Shares of capital;
- Shareholders details;
- Share transfers during the confirmation period.
Notably, any changes in the primary business activities are updated through the confirmation statement itself. It is mandatory to inform Companies House of any changes to your company details as soon as they occur.
On the contrary, you can report the changes in share capital, shareholders’ details (including shareholdings and any share transfers), and SIC codes when filing confirmation statements.
You must file a confirmation statement at least once every 12 months. These 12 months are called your review period. It starts from the incorporation (registration) date or the statement date that was mentioned on your last confirmation statement
Besides, you must submit your confirmation statement to Companies House within 14 days after the review period ends.
Paying corporation tax:
When your company starts trading or conducting its economic activities after incorporation, its trading status becomes active. Hence, it now has to pay Corporation Tax.
For greater clarity, when a limited company starts carrying out any business activity within three months of its incorporation, its registration for Corporation Tax online with HMRC becomes crucial. Consequently, it must now complete and file company tax returns and statutory accounts for HMRC. Ultimately, it will pay Corporation Tax on all its profit.
In addition, Companies House will notify HMRC of your company’s incorporation. Consequently, you will receive a letter from HMRC, outlining reporting and filing obligations for a limited company.
More specifically, HMRC will then inform you of your accounting period for Corporation Tax. For instance, It starts on the date your business starts trading, and it typically ends on your company’s accounting reference date (ARD).
Dormant company:
It must be emphasised that if you do not intend to begin trading for a while after incorporation, your company will have dormant status. In that scenario, you must inform HMRC of your company’s dormancy for Corporation Tax. By doing so, you won’t be expected to file a Company Tax Return until after you start trading.
How to pay corporation tax?
Limited companies need to pay Corporation Tax on all profits between 19% and 25% rates. The rate payable is based on how much profit your company generates annually. Furthermore, you will report the earnings in your Company Tax Return.
In order to pay corporation tax, you must register your limited company for it first.
Generally, you can register for Corporation Tax online by giving HMRC relevant information, like your company’s registration number, the date your limited company started trading, and its annual accounts preparation date.
Now, for registration, you will need your company’s 10-digit Unique Taxpayer Reference (UTR). HMRC posts this unique UTR to your registered office address within 14 days of your company incorporation.
Next, you will create a Government Gateway account online using your UTR. After completing your registration, you can easily pay corporation tax along with submitting company tax returns and annual accounts to HMRC.
More importantly, the Corporation Tax deadline is no later than nine months and one day following the end of your accounting period.
Preparing company tax returns:
After your limited company becomes active for Corporation Tax, you must prepare Company Tax Returns (CT600) and full statutory accounts with HMRC each year. On the contrary, if your company’s status is dormant or inactive for Corporation Tax purposes, no tax return filings are required.
Moving ahead, the deadline for submitting your tax returns is 12 months after the end of your company’s accounting period. Likewise, you must provide full annual accounts with your tax returns.
Completing VAT returns:
A limited company must register for VAT, file VAT returns, and pay VAT if the value of its taxable supplies exceeds the existing VAT threshold of £90,000. If its turnover crosses this amount within a 12-month period, you must register your company for VAT with HMRC.
On the contrary, you can opt for voluntary VAT registration if your limited company’s annual turnover remains below the registration threshold.
For an in-depth analysis of a limited company’s VAT obligations, read our detailed guides:
What are the VAT requirements for a limited company?
How to register a limited company for VAT?
What VAT scheme is best for your limited company?
Registering for PAYE:
If the limited company has employed staff (employees) to ensure the smooth execution of operational tasks, it will have to pay salaries or wages to the employees through payroll.
As a result, registration for the PAYE system becomes mandatory if your company employees receive salaries via payroll. It includes directors as well. Besides handling salaries, there are several reporting obligations to meet under PAYE.
For instance, if your limited company employs staff, including a director, it will first set up a PAYE system to pay their salaries. You will enrol for the PAYE system.
Thereafter, you will perform payroll-related duties for HMRC, such as reporting the employees’ wages and deductions to HMRC monthly in a Full Payment Submission (FPS).
FPS reports employees’ salaries/pay, NICs, and income taxes to HMRC. Notably, NICs are paid on behalf of employees earning above a certain threshold.
Last but not least, you must submit the payroll filings on or before the employee’s payday.
Filing Self-Assessment tax Return for directors:
A director also has the filing obligations for a limited company. It includes filing a Self-Assessment tax return. Under self-assessment tax return, a director reports their personal income, including the salary and dividends they receive from the company, and any additional income sources.
Remember that you must submit the Self-Assessment tax by 31 January, after the end of the tax year, and must also pay any taxes owed by this date.
Reporting event-based changes to Companies House and HMRC:
Under the Companies Act 2006, it is compulsory for limited companies to keep different registers and statutory records at their registered office address.
These registers contain significant company details, such as the register of members (shareholders), register of directors, and register of persons with significant control (PSCs).
It is imperative to note that if any changes occur to company details, you must update them in the relevant register with immediate effect. Accordingly, the government agencies and the public can inspect them at any time.
Other than that, notifying Companies House and HMRC regarding any changes that occur also falls under the filing obligations for a limited company. To go into detail, you must report the following changes in your company:
- Change of company name;
- Change of registered office address ( must be reported to Companies House within 14 days);
- Changes to the company’s SIC codes;
- Creating or changing a SAIL address;
- Alterations in the location of statutory company records and registers ( must be reported to Companies House within 14 days);
- Appointment or removal of a company director or secretary (must be reported to Companies House within 14 days);
- Appointment or removal of a PSC;
- Changes in the PSC register;
- Changes in the details of existing directors and secretaries (must be reported to Companies House within 14 days);
- Shares Issuance or transfer;
- Changes to the Articles of Association;
- Updates to the company’s share capital;
- A change to the company’s Accounting Reference Date (ARD);
- Reporting the status of your company as dormant if it is inactive;
- Changing the trading status of your company from dormant to active;
- Change in the accounting period for Corporation Tax;
- VAT details (registration, payment etc);
- PAYE and Payroll details;
- Self-assessment information;
- Appointment of an accountant or tax advisor.
Who manages the filing obligations for a limited company?
It is utterly important to know that director(s) are legally responsible for meeting the filing obligations for a limited company. It also holds even if any of the above-cited requirements have been handed over or delegated to a company secretary or accountant.
More crucially, non-compliance with filing obligations for a limited company can result in serious consequences, like financial sanctions, director disqualification, company dissolution, and litigation.
Conclusion:
Overall, the filing obligations for a limited company ensure transparency, accountability, and compliance with HMRC. Also, they establish your credibility with potential clients and investors alike.
It is relevant to mention failure to meet these obligations can lead to penalties, fines, or possibly the dissolution of your limited company. However, worry not! You can familiarise yourself with these filing obligations to clearly understand your duties as a director and company owner.
Accountingfirms is at your disposal for this purpose. With our price comparison list, you can find an affordable and nearby accountant. Consequently, you can secure a tailored consultation, from limited company set-up to its registration with Companies House and tax returns submissions with HMRC. Hence, start eliminating your business hassles with us today!
Disclaimer: The information provided on AccountingFirms.co.uk is for informational purposes only and should not be considered as financial advice. Always consult with a professional accountant to ensure compliance with UK laws and regulations.