This blog post follows on from one I wrote earlier this year around why you might want to start a limited company. 

When you run your own limited company, there are several things you need to do to ensure your company is compliant with all of the requirements from Companies House and HMRC. I will briefly explain many of them here, but please feel free to get in touch if you want to discuss any of these in detail.

Companies House – Confirmation Statement

Once a year, around the anniversary of founding your company, you will be required to file a Confirmation Statement with Companies House. This replaces what used to be called an Annual Return but is essentially still the same thing.

Companies House essentially want you to confirm with them the details of the company and the ownership and management structure. With most companies this is essentially just a case of confirming that the registered office and director details are correct.

At the time of writing, Companies House charges a fee of £13 for completing the Confirmation Statement. You can get an accountant to complete the Confirmation Statement for you, however it should not be too difficult to complete yourself. To file your confirmation statement you can go here.

Companies House – Annual Accounts

The other key thing you need to submit to Companies House will be your annual accounts. Your company will have a year end date which will usually be on or around the anniversary of the formation of your company. You can opt to change this if you wish, although once you change it you will not be able to do so again for 5 years without an exceptional reason. You may want to amend it so it more aligns with your business (if your business is seasonal, for example) or a company in the same group as you, but most people leave it as the anniversary of the company formation.

You have 9 months after the date of your year end to submit these accounts. The amount of information that these submitted accounts need to contain varies depending on the size of your company – for small businesses you may only need to submit a balance sheet, for larger companies you will also need to include a profit and loss account and notes that help to further explain the information contained in the accounts. I will explain each of these in further detail in other blog posts in the future.

HMRC – Corporation Tax Return

The key thing you will need to submit to HMRC annually will be your Corporation Tax return. This will usually be prepared hand in hand with the annual accounts as numbers in one will affect the other.

You have 9 months and a day to submit your Corporation Tax return after your company’s year end and the bill usually needs to be paid by the same date as well.

The tax due will be calculated by taking the profit made in your accounts, making any necessary accounting adjustments and then applying the Corporation Tax rate (currently 19%) to get your final tax bill. 

HMRC – VAT

I am writing a series of posts on VAT separately which will help to explain this in more detail, but the key thing to note is that, unless you are selling goods or services which are exempt from VAT then you need to be regularly reviewing whether your turnover (your income before any expenses are deducted) in the last 12 months exceeds the VAT threshold, which is currently set at £85,000. If it does, then you will need to become VAT registered immediately. You can opt to voluntarily register for VAT which may be beneficial to your business.

If you are VAT registered, then there will be compliance duties around this which I will cover in further detail in the series of blogs around VAT.

You will actually need to keep an eye on whether you need to register for VAT whether you are self-employed or running a limited company, but I’ve included it here as it is something that not everyone may be aware of.  

HMRC – Payroll

This is another thing that can also affect self-employed individuals which is again included for completeness.

If you employ any staff (including yourself) then you will need to send payroll updates through the Pay As You Earn scheme (PAYE) to HMRC on a regular basis, which is usually monthly. 

The next article in this series of blogs will discuss taking money out of your company, and why you might want to employ yourself. This should hopefully be up in the near future.