Are you struggling to navigate the complex accounting/ tax landscape for UK limited companies? Working with an experienced accountant can help you manage your tax obligations effectively because, unlike sole traders, limited companies face greater tax responsibilities and stricter compliance requirements.
Even if you already work with tax professionals, understanding UK tax regulations and monitoring your company’s financial statements are essential. Key responsibilities include corporation tax (CT600), PAYE, VAT registration, and other essential filings—compliance is not optional. Stay ahead by staying informed and proactive with your financial responsibilities to keep your business on the right track.
Accounting year for limited company
UK limited company’s accounting year differs from a sole trader’s fiscal year. It begins in the month the company was established. For example, if a company was incorporated in March 2024, its accounting year would run from March 2024 to February 2025. However, business owners can request to change the accounting year, subject to HMRC guidelines and Companies House requirements.
Accounts
Limited companies file their financial statements within 9 months after the end of their accounting year. Financial statements show the company’s finances including assets, liabilities, and other financial information, which must be submitted to Companies House.
*Note: the balance sheet, one of the most critical components of the financial statement, becomes publicly accessible to anyone on the Companies House website once submitted.
Corporation Tax: CT600
The corporation tax return (CT600) must be submitted to HMRC within 12 months after the end of the company’s accounting year. Unlike the financial statements, the CT600 primarily reports the company’s profits rather than the overall company’s finances. While the filing deadline is 12 months, the tax payment must be made within 9 months after the end of the accounting year. To avoid penalties, ensure you prepare the tax return and make the payment before these deadlines.
Confirmation Statement
All limited companies are required to submit a confirmation statement to Companies House to update any company changes. This filing is mandatory, even if no information has changed.
VAT registration
For general business owners, VAT registration is required when a company’s annual turnover reaches or exceeds £90,000. However, depending on the business’s circumstances, companies may choose to voluntarily register for VAT before reaching this threshold. Consider your business category and specific circumstances when deciding whether to register, even if your turnover has not yet reached £90,000.
PAYE Registration
PAYE (Pay As You Earn) registration is essential for processing salaries for directors and employees. To register for PAYE, you will need the director’s National Insurance (NI) number and the date of the first salary payment. Once registered, you will receive a PAYE Reference Number. When filing PAYE, you must provide the PAYE Reference Number, a Starter Checklist for each employee (including personal details and NI number), and salary information. If you hire an accountant, they can also generate payslips for employees.
Pensions
In the UK, pensions are categorised into two types: the State Pension and the Workplace Pension. Business owners should pay particular attention to Workplace Pensions.
If you hire an employee aged 22 or older and pay them an annual salary of £10,000 or more, you must enrol them in UK pension schemes. This process is known as automatic enrolment. If the employee does not wish to participate, they must opt out themselves.
Self-Assessment
Self assessment is not the requirement of a UK limited company per se. However, HMRC expects you to register for self assessment as they expect you to have had dividend income from your own business.
