What are the deadlines for filing my limited company accounts?
Companies have their own financial year end given by companies house, this is usually twelve months after they initially set up. They then have 9 months from their financial year end to file their abbreviated accounts with companies house and 12 months to file their corporation tax return and accounts with HMRC. However, even though the company has 12 months to file the corporation tax return, any amount due to HMRC must be paid 9 months and 1 days after their financial year end.
What expenses can I claim for as a limited company?
The expenses you can claim for are very specific to each trade, for example, a consultant cannot claim for all the same things a plumber can claim for although there will be some things that can be claimed for by both such as travel and telephone bills. We can provide some general guidance in the form of a leaflet or a bespoke list. Fill out our 'contact us' form for more information.
How does VAT work?
Standard VAT works by adding up all the VAT you have charged on your sales, deducting all the VAT you have paid out to your suppliers and handing over the difference to HMRC. This information is usually reported to HMRC on a quarterly basis via completing a VAT return. There are different schemes available such as the flat rate scheme which can help to save you money but speak to us about the different options and we will help you decide what’s more suitable for your business.
Do I use Ltd or Limited?
We are often asked to explain the difference between ‘Limited’ and ‘Ltd’ at the end of a company name. There is absolutely no difference, other than the fact that one is a complete word and the other is a shortened form. It’s entirely up to you whether to use Limited or Ltd. However, if you incorporate a company as limited you can use limited or Ltd but if you incorporate as Ltd then you can only use Ltd and not Limited
How much is employment allowance for 2022-23 and how do I claim it?
The employment allowance increased to £5,000 in the budget (£4,000 21-22) most payroll software providers claim this for your company by submitting an EPS. This will claim the allowance and it will show on your P32 (monthly PAYE statement) recovering the Employers NIC until the full allowance is used. If you don't have payroll software you can use HMRC basic tools to submit the claim. If you miss a year you can recover the allowance from HMRC for a maximum of 4 years.
Can I charge interest if I loan my company money?
Yes, if you are funding your business through personal loans to the company you can charge your company interest. The interest counts as a business expense to your company, and personal income to you, so you must report the income on a personal Self Assessment tax return and report and pay the Income Tax every quarter using form CT61.
Can my business partner waiver his rights to a dividend?
A dividend waiver is a document signed by a shareholding waiving his rights to a dividend. The waiver must be signed at the start of the financial year, before there is any indication of future profits. It should also be properly witnessed (by a lawyer).
Is coffee for a client tax deductable?
The short answer is: "no" – at least where it would be classed as business entertaining. Tax relief may be available in respect to expenditure on subsistence or staff entertaining (subject to satisfying certain criteria), but tax relief on business entertaining is not available. HMRC class business entertainment as being the provision of free or subsidised hospitality or entertainment offered to a customer or potential customer. Therefore, the purchase of a 'Frappuccino' for a customer would be classed as hospitality and therefore, would not attract tax relief.
Is private healthcare tax deductable?
Yes, absolutely, paying your healthcare through your company is classed as a benefit in kind. You would allocate this as a business expense and complete a P11d annually to notify HMRC of the benefit in kind (BIK) and pay class 2 employers national insurance contributions. As an example, if your healthcare scheme is £10,000 annually you would pay HMRC £1,505.00 (15.05%). Deadline for submission of the P11d form is 6th July and payment should be made by 19th July.
Where can I seek some free employment law advice?
The Acas helpline is for anyone who needs employment law or workplace advice, including employers, employees and workers. Their advice is completely free and highly confidential, you do not need to give your name. They will advise regarding any work-related problem, or questions you have around your contract of employment, what the law says and how it relates to you and also good practice at work, including your options, and any risks and benefits. Tel: 0300 123 1100
When should I register for VAT?
This is certainly a common question and one which can be expensive if you don't know the rules. You can voluntarily register your company, which may help with the kudos of you brand, however if you are B2C consider what your customer may say if you have to put your prices up by 20% when you do register. Once your turnover hits £85,000 (until March 2024) you must register, and if on a rolling month basis you are going to hit the threshold you must also register, unless your a seasonal business and just experiencing a peak. Once you register you must start charging VAT, issuing VAT inclusive sales invoices to begin collecting VAT until your VAT number arrives. In your first VAT return (5 weeks after your first quarter end) you can recover the net amount of VAT or will make a payment if your sales are higher. You can include in your claim the VAT you have paid on assets you have purchased for the business, going back 4 years, however you can only claim for VAT on services for 6 months. So, if you intend on using professional services to start a company where you may have large lawyer or accountancy invoices, it may be worth voluntarily registering so you don't lose this input VAT. There are other variables, so if you wish to contact us we'd be happy to help.
When does the self employment tax year start and end?
The tax year for self employed and sole traders is 6th April to 5th April. If you are self employed you need to submit your self assessment by the 31st January and if the amount you owe HMRC is over £1,000 you will be asked to pay another 50% of the amount owing ahead of the next years tax in July. Due to the effects of Covid 19 we have seen HMRC waiver some of these in extreme circumstances.
How do I switch Accountant?
There are different reasons to move from your existing Accountant, maybe they missed a deadline, only call you once a year, don't call you at all? We believe in speaking to our clients at a frequency to suit them and consult them about this at the start or our working partnership. To move from one Accountant to the next is very simple. You should first find a suitably qualified replacement and ask for a referral or recommendation. Then let your Accountant know when you intend to move and who to, they will do the rest. They will contact the other Accounting firm and seek professional clearance to cover off any outstanding important matters and handover the books and records, or in today's terms change the users on the accounting software and share the Annual Accounts, and Tax returns they have submitted in the last two years. There may be other requirements depending on the situation but it's all handled professionally and seamlessly as part of our code of conduct.
What calculations can I use to determine my business performance?
Profitability, Liquidity, Insolvency and Financial Leverage ratios are all important factors to consider. Read our ratios blog here: