Please help I am extremely lost 😞

Km1989

Thank you for reading this and if you offer guidance thank you even more.

I work in full time employment and earn a modest 25,000£ in Scotland per year which my work deals with all my taxes etc

i started a ltd company to be legal and do the right thing as I write books and wanted to do everything legally.

the ltd company is only me and it started in April 30th2020 since it traded I had 568£ in expenses and 760£ in dividends I took, there is no cash sitting in a reserve it really is just a simple small operation.

with self assessment coming up will this be something I have to do? I spoke to HMRC and the woman said no but she didn’t sound sure, but I was grateful for her advice regardless.

the second question is what exactly do I need to do come the end of the year (April) I can’t afford a fancy accountant to do all this and my business is literally money in I pay expenses for shipping and payment merchant costs and then the rest comes out as a dividend payment . What books do I need to complete and how do I complete these 

I will never take more than 2000£ from the business as it won’t ever make that and I won’t ever take a wage.

All I have done to this date is register the business I haven’t actually done anything else aside from that 

I feel I may just close it down because this is all over my head and making me feel really overwhelmed

Dazed_and_C0nfused

Why did you set it up as a limited company?

[Deleted User]

Personally, I would dissolve the company and become self-employed. On those figures you could claim the trading allowance and, as a result, eliminate any tax saving advantages (if there ever were any) by being limited. The administration associated with a Ltd Company is not for the novice. Respectfully, given your knowledge, you will need an accountant. It just seems to me that you would get rid of a lot of unnecessary stress by dissolving.

oldbikebloke

"you" have a limited company, it is a legal entity in its own right and therefore is required to produce formal accounts in accordance with company law  which must be in a set format ("statutory accounts"). You cannot DIY that from scratch without doing hundreds of hours of research and learning, you will need an accountant...

The company will be required to file those accounts at Companies House (they will chase if it doesn't, and it will be fined) and to submit a tax return to HMRC (they will chase if it doesn't, and it will be fined) 

Even if you "close" it now, the company has traded and so will need to produce one set of accounts as it will have a corporation tax liability of its own.
If you have taken "all" the money out as "dividends", then the company may have a problem with "illegal" dividends - ie paid out more than it has as distributable profits after tax, since you state there is no money left in reserve so presumably has no ability to pay the tax for that year?

in the context of self assessment, you received dividends and you include those in your SA. That has nothing to do at all with the company which has its own reporting requirements as above, and they cannot be ignored, but are not on the same timeline as personal SA. For the company timeline read this: 
Accounts and tax returns for private limited companies - GOV.UK (www.gov.uk)

JRWLondon

First things first, you need an accountant. 

You, as the director of a limited company are legally responsible for the maintenance of the company's accounting records.

Failing to do so will result in fines. 

I'll be clear, you will not be able to produce statutory accounts that meet regulatory requirements with no accounting expertise. However, I don't think you need to panic just yet as I think you may have more time than you realise. Saying that, you need to starting getting everything in order asap.

Firstly lets discuss your self assessment requirements.

Like others have mentioned, your company accounts & self assessment are two separate things. 

The self assessment deadline approaching (Jan 31st) is for income earnt in the tax year 6/4/2019 - 5/4/2020. You only need to file a self assessment by the end of Jan this year for earnings between the above dates.  If, for that period you were in employment and paid tax through PAYE, did not earn over £100k and had no other form of income, you probably don't need to file a self assessment. Please note, I said probably. 

Assuming that you took the dividends out of the Ltd company after 5/4/2020, these will fall into the tax year 6/4/2020 - 5/4/2021, for which a self assessment tax return (SA100) will need to be completed and filed by 31/01/2022. To file a self assessment by 31/01/2022 you need to register for self assessment by 5/10/2021, this can be done online. Without knowing your situation it's impossible to tell you what details to include on your self assessment, but dividends received are definitely part of the requirement.

Though you may be entitled to a dividend allowance of £2,000, meaning that if the total amount you receive in dividends between 6/04/2020 - 5/4/2021 is £2,000 or less they will not be subject to tax.  Please note that this includes all dividends from all sources, so if you have other shareholdings, add together all dividends received. 

Now, your limited company accounts.

Firstly I'm fairly certain you have enough time to get everything in order. I believe you have 21 months from the date of incorporation to file your first year accounts. 

Without knowing more information I cannot give you a comprehensive answer, however to answer your questions regarding what you need to prepare, I think you will probably need:

1. A set of FRS105 small entity accounts to be filed at companies house & HMRC

2. A CT600 company tax return (potentially two depending on your accounting reference date), to be filed at companies house & HMRC

3. A confirmation statement CS01 to be filed at companies house.

These are all mandatory, and you will be fined if you miss the filing deadlines. 

Please just pay for the services of an accountant for the above, I can't see it costing you much more than £500-600 and will save you masses of stress. 

Dazed_and_C0nfused

Don't forget though that the 31 January Self Assessment deadline is just for those people who have been issued with a return or notice to file a return.

The op hasn't actually made it clear if they have it not.

soolin

To add a small comment to the above excellent responses you will obviously need to deal with the tax implications and filing requirements for the limited company for which an accountant might be needed. Going forward though being a sole trader is likely to be beneficial (unless you have a specific reason for operating as a limited company) , it is much simpler process as book keeping is extremely easy, basically money in, less money out and if your money in does not exceed £1000 then you don't even need to do that.

macman

I have to ask: who advised you to set it up as a limited company just to be 'legal'? There is no legal requirement whatsoever to operate as a limited company at any level of turnover, and to do so for a turnover of less than £2k is just pointless and expensive in time and resources.

Sole trader and self assessment is the way to go.