F.A.Q's and Key Dates

Limited Companies


Q. What is a limited company?

A. A limited company has a legal entity separate from that of its owners. The shareholders of the company are not personally responsible for its liability, which means they do not risk their personal assets if the company was to come into liquidation or any debt.


Q. What do I need to set up a limited company?

A. To set up a limited company you will need the name and the address of the company, the details and address of the directors and, the number of the shareholders of the company and their details.


Q. What kind of accounts and records should a limited company maintain?

A. All companies are required to keep a full record of income, expenditure, liabilities, and assets. They will help your accountant when preparing company’s annual accounts.


Q. Why can trading through a Limited Company, as opposed to self-employment, be more tax efficient?

A. You can pay yourself in the form of Dividends which do not attract either employee or employer's national insurance.

Self Employment


Q. How much tax will I pay being self-employed?

A. Being self-employed means you will be paid the whole amount without any tax removed, you’ll need to put some aside to cover your taxes. As a general rule, we recommend you put 30% of everything you earn to one side, and this should cover your tax and National Insurance.


Q. Do I have to pay national insurance?

A. If you are self-employed you are responsible national insurance contributions on earning above the small profit threshold for that year.


Q. What is a self-assessment?

A. Self assessment is where you make your own assessment to income tax, corporation tax, or capital gains tax as appropriate. You make a self-assessment when you file your annual tax return by completing the self-assessment panel in that form.


Q. How do I register as self-employed?

A. You will need to register with HMRC. For a newly self-employed person failure to register within three months will result in a fine.


Q. Can I claim for travel expenses?

A. You can claim for your car, rail travel and any other business related travel costs you incur. Make sure that you keep hold of any receipts, to prove that the expense was incurred.


Q. How do I pay tax?

A. You will pay your tax by doing a tax return. You tell HMRC about your income and your expenses, which ultimately gives them details of your profit figure, and this is what you will be taxed on.


Q. When do I have to charge VAT?

A. You will not need to charge VAT on any of your goods or services until you have reached the VAT threshold amount of £82,000. Once over the threshold amount, it is mandatory that you register for VAT and start charging VAT on your goods and services, from the day you have registered.

Management Accounts


Q. What are statutory accounts?

A. These are year-end accounts that are given to the relevant authorities. It is useful to appoint an accountant or advisor who will prepare these accounts for you and gives you the appropriate information.


Q. What is management accounting?

A. Its analysing costs, producing realistic budgets and then comparing these to your company’s actual performance on a periodic basis.


Q. What’s the difference between management accounting and what my accountant does at the end of the year?

A. Your financial accountant focuses on Tax. A management accountant, on the other hand, is there to help you throughout the year by regularly providing you with useful information that will enable you to make good decisions.


Q. What is corporation tax?

A. This is tax paid by UK limited companies on ‘chargeable profits’, the rates are unchangeable and are set up by the government.

Workplace Pensions


Q. What is Auto-Enrolment?

A. Every employer with at least one employee now has to put those who meet the certain criteria into a workplace pension scheme and contribute towards it. It’s called Automatic Enrolment because it is automatic for employees, they don’t have to do anything to be enrolled in the pension scheme. Many people just don’t get round to arranging a pension scheme, so rather than having to sort it all out, your employer will do it for you.


Q. Can I opt out?

A. You don’t have to be part of your workplace pension if you don’t want to be. Think carefully before opting out, as it may affect how much money you have when you retire. You can only opt out of a workplace pension during a certain time.


Q. What happens if I already have a company pension scheme?

A. Even if you already have a company pension scheme you will need to review the arrangements to ensure it meets the minimum requirements for auto enrolment. You will also need to review your responsibilities for employees not currently in the scheme or new employees.


Q. Does the change in the law affect me or my business?

A. If you have at least one employee, then yes, you’ll have to comply with the new law. If you have any workers who are over 22, under the state retirement age and earning at least £10,000, you must automatically enroll them into a pension scheme. If the worker stays in, or wants to join then they contribute and so do you.


Q. When will the change affect me?

A. Each employer will be given a staging date. A staging date is the first date that you must comply with the requirements for auto enrolment. Before your fixed Staging Date you will need to have assessed your workforce to see who’s eligible to join your pension scheme, chose a pension scheme and then set it up.

Important Dates for Individuals and Self Employed:


5th April


31st July


5th October


31st October


31st October


30th December


31st January


31st January


5th April


31st July

End of Tax Year


2nd Payment on Account of tax for prior year due to HMRC


Last day to advise HMRC that you need to register for Self-Assessment for the prior Tax Year


Closing date for filing Paper Income Tax Return with HMRC


Last day for submitting Tax Return if you want HMRC to calculate your tax liability


Last available day for filing Income Tax return with HMRC if you want any Tax collected through your PAYE Coding (under £3,000)


Payment of the balance of any tax, national insurance and student loan owed to HMRC for the prior year.


1st Payment on Account of tax for prior year due to HMRC. Cut off date for filing your income tax return.


End of Tax Year


2nd Payment on Account of tax for prior year due to HMRC

Important Dates for Companies and Self Employed:


Corporation Tax payments are due 9 months and 1 day following your financial year end.

e.g. – Year End is 31st December. Any Corporation Tax owed must be paid by 1st October

The Corporation Tax return (also known as CT600) has to be filed within 12 months after the end of the accounting period.


CIS

Returns must reach HMRC by the 19th of each month.


VAT

Accounting Quarter period ends 28th Feb – VAT return due 7th April

Accounting Quarter period ends 31st Mar – VAT return due 7th May

Accounting Quarter period ends 30th Apr – VAT return due 7th June

Accounting Quarter period ends 31st May – VAT return due 7th July


PAYE

31 May

6 July

Issue P60s to employees.

P9D, P11D and P11Db - also issue copies to employees
Form 42 (reporting of employment-related securities)



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