FAQs

Company Accounts & Corporation Tax Return

  • Your limited company accounts are due nine months after the end of your financial year.

    The company’s corporation tax retun is due 12 months after the end of your accounting period with the tax being due 9 months and 1 day after your financial year.

  • You can generally put through legitimate business expenses in your company accounts. These may include expenses such as salaries, rent, utilities, office supplies, travel costs, professional fees, advertising, and insurance. However, it's important to ensure that these expenses are incurred wholly and exclusively for business purposes and comply with tax regulations.

  • From April 2023, businesses will pay 25 per cent corporation tax rate, provided they report profits above £250,000. Smaller entities with profits of up to £50,000 will remain at the 19 per cent rate.

    All other businesses that file profits of £50,001 and above but below £250,000 will receive marginal relief of 26.5 per cent. Marginal relief implements a gradual increase in corporation tax rates for companies making profits that fall between the lower and upper limits.

  • You can pay your tax bill using the following methods:

    Same day or next day

    • approve a payment through your online bank account

    • online or telephone banking by Faster Payments or CHAPS (sort code: 08 32 10, account number: 12001039, account name - HMRC Cumbernauld)

    • online by debit or corporate credit card

    3 working days

    • Direct Debit (if you’ve set up one for HMRC before)

    • online or telephone banking by Bacs

    • at your bank or building society

    5 working days

    • Direct Debit (if you have not set up one for HMRC before)

VAT

  • The standard rate of Value Added Tax (VAT) in the UK is 20%. This rate applies to most goods and services, unless they qualify for a reduced rate or are exempt from VAT altogether.

    However, there are also reduced rates and zero rates for certain goods and services. For example:

    Reduced rate: Some goods and services qualify for a reduced VAT rate of 5%. This includes items like domestic fuel and power, children's car seats, and energy-saving materials.

    Zero rate: Certain goods and services are zero-rated, meaning VAT is charged at 0%. This includes items such as most food (but not restaurant meals), books, newspapers, children's clothing and shoes, and public transport fares.

  • The VAT registration threshold in the UK, as of 1 April 2024, is £90,000 of taxable turnover in a 12-month period. This means that if your VAT taxable turnover exceeds £90,000 in any rolling 12-month period, you must register for VAT with HM Revenue and Customs (HMRC).

    However, it's important to note that even if your turnover is below the threshold, you can still voluntarily register for VAT.

    It's important to keep an eye on your turnover and comply with VAT regulations to avoid penalties for late registration or non-compliance.

  • VAT deadlines that businesses registered for VAT should be aware of:

    VAT return submission: VAT-registered businesses must submit their VAT returns to HM Revenue and Customs (HMRC) usually every three months. The deadlines for submitting VAT returns depend on the VAT accounting period set by HMRC, but they typically fall one month and seven days after the end of the VAT accounting period.

    VAT payment: Along with submitting your VAT return, you're required to pay any VAT due to HMRC by the deadline. This payment is usually due at the same time as the VAT return submission deadline. If you pay by Direct Debit, HMRC will collect the payment automatically from your bank account a few working days after the deadline.

Bookkeeping and Company Secretarial

  • Businesses are required to keep their bookkeeping records for a certain period of time to comply with HM Revenue and Customs (HMRC) regulations. The recommended period for keeping business records varies depending on the type of record and the specific circumstances of the business. Here are some general guidelines:

    Business records: HMRC advises that businesses keep records for at least 6 years from the end of the accounting period they relate to. This includes records such as sales and purchase invoices, receipts, bank statements, and accounting ledgers.

    VAT records: VAT records must be kept for at least 6 years, including copies of VAT returns, VAT invoices, and records of VAT payments made and received.

    PAYE records: If you have employees, you must keep PAYE (Pay As You Earn) records, including payroll records, for at least 6 years from the end of the tax year they relate to.

    Company records: Limited companies must keep certain company records, such as minutes of meetings, share registers, and accounting records, for at least 6 years from the end of the financial year they relate to.

  • Companies are required to file a confirmation statement at least once every 12 months with Companies House. This is a legal requirement for all limited companies, including private companies limited by shares, limited by guarantee, and public limited companies (PLCs).

    The confirmation statement replaces the annual return and serves to confirm or update the information held by Companies House about your company. It includes details such as:

    • Company name and number

    • Registered office address

    • Directors and company secretary (if applicable)

    • Shareholders and share capital

    • Persons with significant control (PSCs)

    • SIC (Standard Industrial Classification) code

    • Statement of capital (if applicable)

    • Shareholder information (if applicable)

Self Assessment

  • Self-assessment tax deadlines typically revolve around the tax year, which runs from April 6th of one year to April 5th of the next. Here are some key deadlines you should be aware of:

    Registering for self-assessment: The deadline for registration is usually by October 5th following the end of the tax year in which you became liable to submit a tax return.

    Paper tax return deadline: If you choose to submit a paper tax return, the deadline for this is usually October 31st following the end of the tax year.

    Online tax return deadline: If you're submitting your tax return online, the deadline is usually by January 31st following the end of the tax year.

    Payment deadline: Regardless of whether you submit your tax return by paper or online, you must also ensure that any tax you owe is paid by January 31st. This includes any balancing payment for the previous tax year and the first payment on account for the current tax year.

    Final payment deadline for tax due: If you miss the January 31st deadline, you may be subject to penalties and interest on any outstanding tax. It’s crucial to pay any tax due as soon as possible to minimize these charges.

  • You can pay your tax bill using the following methods:

    Same or next day

    • through your online bank account

    • using online or telephone banking (Faster Payments) (sort code: 08 32 10, account number: 12001039, account name - HMRC Cumbernauld)

    • by CHAPS

    • by debit or corporate credit card online

    • at your bank or building society

    You need a paying-in slip from HMRC to pay at a bank or building society.

    3 working days

    • Bacs

    • Direct Debit (if you’ve set one up with HMRC before)

    • cheque through the post

    5 working days

    • Direct Debit (if you have not set one up with HMRC before)

  • A payment on account is an advance payment towards your tax bill for the upcoming tax year. It’s essentially a way for HM Revenue and Customs (HMRC) to collect tax in advance, based on your previous year's tax liability.

    Here's how it works:

    Calculation: After you submit your tax return for the previous tax year (by January 31st), HMRC calculates your tax liability. If the tax you owe exceeds £1,000 and less than 80% of your tax is collected at source (e.g., through PAYE if you're employed), you'll likely have to make payments on account.

    Amount: Each payment on account is typically half of your previous year's tax bill. For example, if your tax bill for the previous tax year was £10,000, you would make two payments on account of £5,000 each.

    Due dates: Payments on account are due in two installments:

    The first installment is due by January 31st (the same day as your balancing payment for the previous tax year). The second installment is due by July 31st of the same tax year.

    Adjustments: When you submit your tax return for the current tax year, any difference between your actual tax liability and the payments on account you've made will be calculated. If you've paid too much, you'll be entitled to a refund. If you haven't paid enough, you'll need to make a 'balancing payment' by January 31st of the following year.

  • HM Revenue and Customs (HMRC) imposes penalties for late filing. The penalties are as follows:

    • £100 if your tax return is up to 3 months late

    • £10 per day for up to 90 days if your tax return is 3 to 6 months late

    • The greater of £300 or 5% of the tax due if your tax return is more than 6 months late

    • The greater of £300 or 5% of the tax due if your tax return is more than 12 months late

    You may also have to pay interest on any tax you owe, starting from the day after the deadline for payment (January 31st) until you pay the outstanding amount.

Payroll & CIS

  • For payroll and the Construction Industry Scheme (CIS) in the UK, there are several deadlines that employers and contractors need to be aware of to ensure compliance with HM Revenue and Customs (HMRC) regulations:

    Payroll Deadlines:

    Payroll processing: You should ensure that your payroll is processed accurately and on time, usually before payday, to ensure that employees are paid correctly and on time.

    PAYE payments: If you're an employer, you must make PAYE (Pay As You Earn) payments to HMRC on or before the 22nd of each month (or the 19th if paying by post).

    Real-Time Information (RTI) submissions: Employers must submit Full Payment Submissions (FPS) to HMRC each time they pay employees, on or before the payday. You also need to submit an Employer Payment Summary (EPS) if required.

    Annual Deadlines:

    End of tax year reporting: At the end of the tax year (April 5th), employers must provide employees with a P60 form by May 31st, detailing their total pay and deductions for the year.

  • Auto-enrolment is a UK government initiative designed to help people save for their retirement by making workplace pension schemes more accessible. The initiative requires employers to automatically enroll eligible workers into a qualifying workplace pension scheme and to make contributions to their pension savings.

  • The amount you pay depends on how much you earn.

    Every taxpayer in the UK receives a tax-free personal allowance each year. For the 2024-25 tax year, your employees will receive a tax free earnings allowance of £12,570.

    This personal allowance may change depending on the circumstances of the employee, including whether they are transferring some of their personal allowance through to their partner via the marriage allowance, or if they have more than one employer.

    The standard rates of PAYE are 20%, 40% and 45%, and national insurance is 8% for employees and 13.8% for employers, with an additional rate of 2% for employees with the highest earnings.

  • A UTR (Unique Taxpayer Reference) number is a 10-digit code used by HM Revenue and Customs (HMRC) in the United Kingdom to identify individuals and entities for tax purposes.

    In the context of the Construction Industry Scheme (CIS), the UTR number is also used to identify subcontractors registered under the scheme. Contractors are required to verify subcontractors' UTR numbers with HMRC and report payments made to them.

  • For payroll and the Construction Industry Scheme (CIS) in the UK, there are several deadlines that employers and contractors need to be aware of to ensure compliance with HM Revenue and Customs (HMRC) regulations:

    Construction Industry Scheme (CIS) Deadlines:

    Monthly CIS return: If you're a contractor under the CIS, you must submit a monthly CIS return to HMRC by the 19th of each month following the end of the tax month to which the return relates. This return includes details of payments made to subcontractors and any deductions made.

    CIS deductions payments: Contractors must pay any CIS deductions withheld from subcontractors to HMRC by the 22nd of each month (or the 19th if paying by post) following the end of the tax month to which the deductions relate.