Starting a company just before tax deadline

[electroforms]

Hello

I'm still getting things prepared and haven't started trading yet.

If I form a company now, then do I need to file tax returns by the 1st April 2010?

I'm thinking that if I make £100 over the next month, but need to pay £1000 in accountant's fees to process the tax paperwork, that's not a good start!

Total newbie so any advice appreciated.

Thanks

[RAL]

If I form a company now, then do I need to file tax returns by the 1st April 2010?


No. CT due date is 9 months and 1 day from end of the accounting period. (Accounting year end). You have 12 month to file the return from end of the accounting period (Accounting year end)


I'm thinking that if I make £100 over the next month, but need to pay £1000 in accountant's fees to process the tax paperwork, that's not a good start!



It depends what services you require. If you do maximum bookkeeping and just use for statutory accounts and corporation tax, then it would cost less.

HTH

[electroforms]

Thanks, I'm picking up a little information from everyone and everywhere and it all helps!

I've seen on-line accountants that charge a monthly fee, seems decent but I don't want to be putting out £100 a month just now until I start bringing in business.

When you say CT - does that mean that because I don't take any money OUT the company personally, it doesn't affect my IncomeTax/NI at all (I don't need to worry about self-assessment etc) ?

I heard I needed a Chartered Accountant when I set up the company - is this the case?

[RAL]

CT= Corporation tax. Limited company pays corporation tax on its profit.

I got the impression from your first post that you wanted to form a company, I thought it would be a limited company.

So let me ask you, how are you going to trade? Limtied company or sole trader?

[RAL]

When you say CT - does that mean that because I don't take any money OUT the company personally, it doesn't affect my IncomeTax/NI at all (I don't need to worry about self-assessment etc) ?



If you set up a limited company and do not take out any salary then you do not need to fill yor self assessment unless HMRC ask you to do.

[elainec100@cheapaccounting]

First - read a bit about business structures here:

http://www.franklyaccounts.co.uk/gettingstructure.php

then decide if you are a sole trader:

http://www.franklyaccounts.co.uk/gettingsole.php

or limited company:

http://www.franklyaccounts.co.uk/gettinglimited1.php

then worry about an accountant:

http://www.franklyaccounts.co.uk/gettingaccountant.php

and your accounts:

http://www.franklyaccounts.co.uk/gettingaccounts.php

Good luck - you really need to get to grips with this as part of running your business though

[electroforms]

Thanks all.

Elaine - I checked all that out before (thanks to one of your earlier postings!) - really helpful stuff but still wasn't sure about my particular scenario.

RAL - it is a limited company that I'll be setting up.

In short the answer seems to be - if I set up a company today then I'd need to file the following by 1st April, even if I don't take a penny in income (which is likely as we'd invoice at the end of every month):

Annual Statutory Accounts (full for HMRC and Abbreviated for Companies House)
Annual Return (different to the accounts - which not many seem to be aware of)
CT 600
Full P&L for HMRC
Self assessment for directors

[RAL]

In short the answer seems to be - if I set up a company today then I'd need to file the following by 1st April, even if I don't take a penny in income (which is likely as we'd invoice at the end of every month):



CT dates depend when you start actually trading. Generall if you set up a company today, your accounting period by default will be 21/02/2010 to 21/02/2011.

So you need to file two CT.
1. 21/02/2010 to 20/02/2011
2. 21/02/2011 to 28/02/2011

CT is due 9 months 1 day from 20/02/11 for first period
CT is due 9 months 1 day from 28/02/11 for second period

CT return due date 12 months from accounting period i.e. 28/02/2011 i.e. 28/02/2012.

Above is for HMRC.

[elainec100@cheapaccounting]

If you set up a limited co this month then your year end will be 28/02/11.

The first accounts will be due at Companies House 9 months after the set up date.

The first tax will be due 9 months and one date after the set up date

You may have to complete a self assessment and for the tax year 2009 / 2010 this will be due by 31/01/11

If you are setting up a limited co as we always suggest in here - chat to an accountant sooner rather than later.

Yes it may cost but it will save in the long run, especially if you do not have a clue as to what you are doing.

[electroforms]

That's great - so there doesn't seem to be anything holding me back forming a company now and I can get an accountant within the next month or so, without having to worry about the 1st April 2010.

Thanks a lot!

[elainec100@cheapaccounting]

That's great - so there doesn't seem to be anything holding me back forming a company now and I can get an accountant within the next month or so, without having to worry about the 1st April 2010.

Thanks a lot!

that is correct