Most people running a limited company engage a bookkeeper and/or an accountant to assist them in meeting HMRC and Companies House reporting requirements. However, even with professional support, as a company director, you’re still legally liable for making sure all the required documentation is correct and filed on time. So, it’s well worth making sure you understand what has to be submitted, to whom and when.
You have to file an annual Confirmation Statement with Companies House. This is basically a statement of the current company details and replaced the old Annual Return from June 2016. It has to be filed within 14 days of the day before your anniversary of incorporation (registration), e.g. if you incorporated your company on 1st July 2017, you must submit the first Confirmation Statement by 14th July 2018, and then by 14th July each year. You must make any changes to the information held by Companies House before or at the same time as submitting the Confirmation Statement. Whilst there isn’t a set financial penalty for not filing a return or for late submission, not filing one is a criminal offence and Companies House could strike off your company.
Directors and Office Holders’ Details
The information held by Companies House includes information about each director and other office holders, e.g. your company secretary if you have one. It’s important that you keep this up to date, e.g. if a new director is appointed, your company secretary leaves or if a director moves house.
Register of Persons With Significant Control
Every limited company must have and maintain a Register of Persons With Significant Control – this lists people, companies or other bodies with substantial (over 25%) ownership of shares, voting rights and the ability to appoint or remove directors.
Submission of Accounts to Companies House
Limited company accounts have to be submitted to Companies House within 9 months of your company financial year end. Most companies adopt a financial year end which is the last day of the calendar month in which they were incorporated. However, for new companies, your first set of accounts have to be filed by the day before your first anniversary of incorporation: e.g. for a company registered on 8th August 2017, the first set of accounts would be due by 7th April 2019 (7th August 2018 + 9 months). Adopting a financial year end of 31st August would mean that the second year accounts would be due by 30th April 2020. Late submission can result in heavy penalties starting at £150.
Company accounts have to follow a set format depending on the size of the company. Most small companies are exempt from audit, although there are some exceptions which still have to have audited accounts, such as insurance companies.
Companies can choose to change their financial year end from time to time: changing your year end will move your submission date for Company Accounts, but not for the submission date for your Confirmation Statement.
Corporation Tax Return
Whereas sole traders declare their business’ earnings, expenses and tax due through a personal self-assessment tax return, limited companies have to submit a Company Tax Return to HMRC containing similar business information. It’s worth noting that in addition to the Company Tax Return, all directors also have to submit personal self-assessment tax returns. The difference arises from the fact that for sole traders, both the business owner and the business are the same legal entity, but limited companies are a legal entity in their own right and distinct from their owners.
A Company Tax Return has to be submitted within 12 months of your company financial year end, e.g. by 31st August 2018 for your financial year ending 31st August 2017. However, at the end of their first year, companies have to submit two Company Tax Returns: one covering the first 12 months since their incorporation and one covering the remaining time to the end of their financial year. So, for a company incorporated on 8th August 2017, one Company Tax Return would be required covering the period 8th August 2017 – 7th August 2018 and a second covering the period 8th August 2018 – 31st August 2018. Again, late or inaccurate submissions can result in heavy penalties of £100 upwards.
Your Corporation Tax due is calculated based on the information included in your Company Tax Return. However, it has to be paid within 9 months and 1 day of your financial year end – 3 months before the deadline for submission of your Company Tax Return! In reality, we’d recommend submitting your Companies House Accounts and Company Tax Return at the same time.
Whilst it’s easy to focus on the big annual returns, it’s important to remember that other returns such as your VAT and monthly PAYE submissions and, if you work in the construction industry, your CIS submissions are equally important. If you don’t keep on top of these, you can easily accumulate large penalties.
We hope that this has been useful and would love to hear from you with your comments and questions.