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Limited companies

Operating as a Limited Company is perceived to create a more professional appearance for a business. There are also significant tax advantages available when operating as a Limited Company, as well as limiting the owner’s financial exposure should the business fail.

Just as with a ‘sole trader’ business, Limited Companies need to keep good records of income and expenses (including equipment and vehicles) to enable profits, and a balance sheet, to be calculated. Good records equal lower accountancy and tax fees!

The legal reporting and compliance requirements are a considerable ‘step up’ from sole trader requirements. A good accountant is essential to ensure your business complies with these to avoid punitive fines and tax payments.

Tax position

A Limited Company is a separate legal entity to its owners (the shareholders). The Company can earn income, own assets and must pay tax on its profits.

A company’s first year-end is, by default, 12 months from the end of the month in which it was created (although this can be changed). The Company must file ‘statutory accounts’ with Companies House, in a strictly prescribed format, within 9 months of its year-end. There are significant penalties for non-compliance with this requirement.

Companies pay corporation tax on their profits, and must file a Corporation Tax return (CT600) every year with HM Revenue and Customs, along with a full set of statutory accounts. Tax is calculated on revenue earned, less legitimate business expenses.

Director-shareholders need specialist advice to ensure that money taken out of the company is done so tax-effectively (a mixture of expenses, salary and dividends).

Our service

We offer a ‘one-stop shop’ service to ensure that your Limited Company complies with all statutory and HM Revenue and Customs requirements, including:

  • Production of annual Limited Company statutory accounts in the required legal format
  • Corporation Tax calculations, ensuring every possible tax relief and deduction is claimed (including capital allowance calculations for fixed assets)
  • Dealing with Directors’ payroll and advising on how to take money out of the Company tax-effectively
  • Dealing with VAT returns and registrations (Flat-Rate scheme or standard VAT)
  • General ongoing advice throughout the year (including detailed advice on what expenses can be put through the business)
  • Helping to maintain good accounting records (to help in defending a tax investigation)
  • Personal tax returns for Directors

Start-up company?

Clients that are just beginning to trade as a Limited Company for the first time, we offer a comprehensive ‘Up and Running’ service (see the Business Start-Ups section). This covers all aspects of setting up your Limited Company, followed by ongoing help as required. At year-end, we will then prepare your annual statutory accounts, and calculate the Corporation Tax due, to enable early filing of the accounts, and to assist with cash-flow planning.

Please remember that upfront tax-planning is needed to ensure that all tax-saving opportunities are identified, and penalties are not incurred by withdrawing too much money from the business.

Existing company?

For clients with an existing Limited Company, we would review all aspects of the current accounts and taxation position, dealing with any outstanding matters if required.

Switching accountants is very simple (see the Changing Accountant section), just provide some basic details and we will contact your old accountant to ensure a smooth transfer to us (you don’t need to have settled any outstanding fees with your old accountant to do this).

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