You will not be required to have an audit.
For a limited company you will need to complete the following:-
An Annual Return
This is a snap shot of information about the Company at a point in time eg. who are the shareholders, directors etc. This if often confused with the accounts but is very different.
This must be filed at Companies House along with a fee of £15 if electronic or £30 if paper.
Annual Accounts
Although Companies House only require an abbreviated set of accounts to be filed, which look easy to prepare, HMRC do require a full set of accounts including a detailed profit and loss account and directors report.
Companies House and HMRC are very different government departments and do not work together. So do not assume that just because you have filed some with one of them, the other gets it as well.
CT 600 Corporation Tax Return
Along with the full set of accounts, HMRC will require a CT 600 to be completed.
This is not a straight forward form and, unless you have experience, it is best left to professionals to complete.
Annual Self Assessment
Regardless of how much they earn, each director of the Company may have to complete a self assessment which should show all of their income from every source, not just from the company.
Annual Employer Returns
Any business which employs staff has a number of reporting requirements eg. P35, P14, P11D etc.
Quarterly VAT Returns
Any business, not just companies, whose turnover exceeds VAT threshold in the previous 12 months has to register and account for VAT. The biggest mistake made here is assuming that the need to register relates to the accounting year rather than the previous 12 months from the current date.
Registering for VAT means the completion of a quarterly VAT return. This is due at the end of the month following the quarter end date. So it is essential that the accounts are kept up to date so that this can be completed on time.
Late filing
Late filing of any of the above returns will result in a fine, penalties and interest. In the case of your accounts you can be fined by both Companies House and HMRC. The fines start at £100 and increase from there up to the possibility of a criminal conviction for significant late filing of documents.
Dormant Accounts
It doesn't end there of course. Even when you have stopped trading you have to file dormant accounts each year or if you decide to close the company down there is even a long winded process to follow for that.
As regards if you need an accountant:
One of the most frequently asked questions by a new business is:
Do I need an accountant?
The question really should be:
Can I complete all my filing duties on time?
Now if your reply to that is that you do not know what your filing duties are, do not understand the forms etc then you have answered the question:
Yes you do need an accountant.
There is a lot to running a business and your time could be better spent securing new customers and sales, negotiating with suppliers, managing staff etc.
Expert help in this area can save time and money.
For example
- making sure that you claim all allowable expenses
- ensuring all the forms and accounts are filed on time - late filing can result in huge penalties and fines
- ensuring that correct accounting records are kept which is a statutory duty
Often we hear that new businesses cannot afford an accountant.
Again we ask:
Can you afford not to have an accountant?
With fines starting at £100 and up to £1500 it could be money well spent.
Our advice would be that as a sole trader you could do your accounts and tax returns yourself - if you have the time and experience. If you don't then get an accountant.
However for a limited we think an accountant is essential.
