Starting a company just before tax deadline

electroforms · Feb 20, 2010

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 · Feb 20, 2010

electroforms said:
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)

electroforms said:
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 · Feb 20, 2010

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 · Feb 20, 2010

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 · Feb 20, 2010

electroforms said:
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.

elaine@cheapaccounting · Feb 21, 2010

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 · Feb 21, 2010

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 · Feb 21, 2010

electroforms said:
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.

elaine@cheapaccounting · Feb 21, 2010

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 · Feb 21, 2010

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!

elaine@cheapaccounting · Feb 21, 2010

electroforms said:
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

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