Limited Company Tax questions...

LurthersBoots

Afternoon all, I set up a limited company for some consultancy work I am doing in the recruitment industry. This is my sole line of work.
The business was incorporated on the 1st of May 2013. However I was working in it since March... having generated my first fee on the 31st May 2013 which was paid into my company bank account.

I received a letter last year from HMRC stating important dates.

1st accounting Period end date 30/April/2014
Date which company needs to pay corporation tax 01 Feb 2015
Date which company needs to deliver company Tax Return 31 May 2015

And a second column
Accounting Period end date 31/May/2014
Date which company needs to pay corporation tax 01 March 2015
Date which company needs to deliver company Tax Return 31 May 2015

I understand that this is a way of aligning the two dates together so only one tax return will be placed annually.

However....

When do I submit my accounts?
As it's all relatively uncomplicated work I am maintaining my own books via Kashflow.
Do I have to do anything to lodge/ pay at all this year?

LB

chrismac1

Having formed the company on May 1 2013, your first Companies House default year-end is year ending 31 May 2014. To make things easy, I suggest changing the company year end to 30 April which is a 5 minute job on CH website.

You then have one set of accounts to 30 April 2014, with HMRC filing dates as per your letter, and similar deadline - 31 Jan 15 - for filing at Companies House.

Two things you should probably have already done are:

1. Setting up a PAYE scheme and paying an annual salary of 7.692.
2. Registering for VAT in the flat rate scheme.

The first action will save you 1,538 in corporation tax. The second will make you a profit of 5% to 6% on every sales invoice you raise, assuming your customer is VAT-registered.

You need to get your skates on with the PAYE and VAT unless you have unusual circumstances not mentioned in your post.

trailingspouse

Use an accountant. As a limited company, you're playing with the big boys now. It's more complicated than being a sole trader, and the ways to get it wrong are many and varied. You can still do your own bookkeeping, but a good accountant will keep you right and help you to make sure that the right things are done at the right time.

LurthersBoots

I would like to change the accounting period from 31st may to 30th April.

I am pretty savvy when it comes to the internet usually but really struggled to find a link to on the CH website to get this done?

Couple of other things:

1. Setting up a PAYE scheme and paying an annual salary of 7.692.

Do you mean a salary of £7,692? To avoid personal tax NI e.t.c?

2. Registering for VAT in the flat rate scheme.

Dont you have to earn a certain amount to qualify for this?

When is the deadline to have this done?

Thank very much for both replies....I think I am going to indeed engage an accountant also.

Regards
LB

selyts

You will need to log in to CH website to change your dates.

£7692.00 annual salary keeps you below the personal PAYE & NI threshold and also the employers NI threshold.

You can voluntarily register for VAT but remember that if your clients are not VAT registered this will increase your overall fee to them.

chrismac1

When I log into the dashboard for a given company by keying in the number and authentification code, right in the centre of the screen is a button for:

"change accounting reference date"

Whilst it's perfectly feasible for sole traders to DIY their accounts and not trip up, for anyone without quite a bit of knowledge of the Companies Act and HMRC rules DIY accountancy for a limited company is likely to end in tears. I've done a couple of salvage operations for people who'd made a mess of this and were being asked awkward questions by lenders, HMRC, Student Loans people and so on.

Expect to pay around £700 to £1,000 plus VAT. Expect to save a load more than this in having a tax-efficient setup put in place by your accountant.

LurthersBoots

Done, I have changed the accounting reference period. It was quite easy once I had my Authentication code in my hand (Arrived today!)
I am going to use the accountant that the company I provide services uses.
Do I need to do anything urgently...ie. by the 31st Jan???

Regshoe

LurthersBoots wrote: »

Do I need to do anything urgently...ie. by the 31st Jan???

For the Self-Assessment Return deadline - not unless HMRC have requested you submit a return (and that would relate to you personally and not the company directly). Your company deadlines are as chrismac1 detailed above.

I would suggest if you are going to get an accountant onboard do is ASAP (they may be very busy over the next week though, in the run up to the 31st), then let them make all the VAT/PAYE registrations for you/with you - it's silly to do these things yourself then engage the professional afterwards.

LurthersBoots

Thanks very much.