Forming a new LTD company...?

[HC-Martin]

What's the best time of year (theoretically) to form a new LTD company?

What I am trying to ask is - what month is best to allow me the longest period of time before I have to submit accounts etc...And corporation tax, or does it go 12 months from the end of the month you form the company (therefore meaning there is no difference when you register it?)

Some help would be grand!

 

[Scott-Copywriter]

Well the tax year starts on April 6th so I think forming it after that date would give you the most time to prepare tax returns, I assume.

Why are you wanting to form a limited company?

 

[bwglaw]

Whilst I am not an Accountant I do not think it makes any difference since the Accounting Reference Date can be easily changed. Our ARD is 31 October and we have 10 months from that date to submit statutory accounts

Jonathan

 

[HC-Martin]

Whilst I am not an Accountant I do not think it makes any difference since the Accounting Reference Date can be easily changed. Our ARD is 31 October and we have 10 months from that date to submit statutory accounts

Jonathan

Yes thought it was something along those lines!!! Cheers!

 

[HC-Martin]

Well the tax year starts on April 6th so I think forming it after that date would give you the most time to prepare tax returns, I assume.

Why are you wanting to form a limited company?

After speaking with my accountant that's what he has suggested that I do due to my age, meaning that I can be a director, sign and enter into contractual agreements on behalf of the company whereas I would not be able to do that due to my age as a sole trader.

Any thoughts?

 

[Scott-Copywriter]

After speaking with my accountant that's what he has suggested that I do due to my age, meaning that I can be a director, sign and enter into contractual agreements on behalf of the company whereas I would not be able to do that due to my age as a sole trader.

Any thoughts?

Depends what the agreements are really. If it's anything risky then it's not wise as you know, but you'd also be protected by the limited company depending on the contract (to an extent).

If it's the only option then thats fine, I'm sure you've heard the old argument between sole trader and limited company as many times as I have. Just remember you'll be spending a lot more on accountant work, plus there will be a lot of additional bookkeeping work and generally more stuff to take into account. Additionally it's a long, expensive and complex process to shut down the company if things don't go as planned. ALSO you will end up probably spending more money on tax since you'll have income tax and corporation tax. The only way to avoid this slightly would be to not take out all the money you earn as income.

It's not wise to start a limited company up unless you have a good knowledge of the processes, unless your accountant wants to be there at every turn (which would probably cost you more money). But I'm sure you'll know best in your own situation, just be careful.

 

[Antonia @limeone.com]

You also need to be aware that new legislation Companies Act 2006 is now in force and it is likely that under 18 years old directors will not be able to undertake or carry on with the duties of company director during 2007. Something to ask your accountant about as you need to be able to forward plan based on all risks.

 

[HC-Martin]

Interesting....thanks guys! So in terms of being a sole trader, this is all OK?

What I am trying to say is - If I wanted to set up as a sole trader then I could. Just registers as self employed etc...then i'm away...or is it more complicated than this? Is being a sole trader at 16 a legal option?

 

[Scott-Copywriter]

Interesting....thanks guys! So in terms of being a sole trader, this is all OK?

What I am trying to say is - If I wanted to set up as a sole trader then I could. Just registers as self employed etc...then i'm away...or is it more complicated than this? Is being a sole trader at 16 a legal option?

It's more of a sensible option at our age, unless theres special circumstances involved. It's pretty much as simple as going through the process of registering as self employed, then sorting your tax and accounting system out.

Just go with sold trader until you're earning a stable amount, then think about whether a limited company is suited. If it was me I'd avoid signing any contracts entirely, since if anything goes wrong I know I can't afford to pay anything back.

 

[Kent Accountant]

Can't answer whether you should be a sole trader or company without further information, but unless you are likely to make £30K + profit or have other income would probably go fo a sole trader - to register http://www.hmrc.gov.uk/businesses/tmastarting-up-in-business.shtml

 

[accountant]

Well, you must bear in mind the various legal requirements. Among them following are important.

1. PAYE - Employer's annual return
2. VAT - Quarterly Returns
3. Corporation Tax Return
4. Companies house Annual Return

Each of them involves certain deadlines to be met by the company. If the company miss them, the company itself alongwith the directors and secretary is liable to penalty and in some cases also for criminal prosecution.

The deadlines are as follows

1. Paye - Employer's Annual Return - 19th May each year irrespective of the period for which the company prepares the accounts

2. VAT - Quarterly Returns. - With one month from the end of each VAT quarter. Your VAT quarter will be notified to you and the quarterly return will be sent to you by HMRC and the VAT return will itself contain the due date thereof.

3. Corporation Tax return - This date will be based upon the CT AP (Corporation Tax Accounting Period) of the company. CT AP is a highly technical term and a deep concept. The legal filing date for the Corporation Tax return is 12 months after the end of AP. Situation gets changed when your company receives notice in form CT603

4. Companies House Annual Return - with in 28 days of made up date.

In short, Corporation tax return and Companies house annual return is determined based on your accounting period. and you are indifferent in VAT returns and PAYE.

Hence, if you start your company somewhere in April, You will get the longest period to deal with your PAYE with will be 19th may next year. Once you are incorporated and also registered for corporation tax, Your formalities will be due next year anyway..

Regards,

Kandarp Soni