Black and White Accounting works with hundreds of limited companies and their directors in Hampshire, Surrey and surrounding areas. We are a team of accountants, bookkeepers, and business advisors with a combined 150 years of experience between us.

There are hundreds of thousands of limited companies in the UK. Limited companies are taxed independently of their shareholders and, while running one can save you a lot of money, there are additional paperwork requirements that you have to fulfil.

Take advantage of our free hour’s consultation so that we can find out more about you and tailor a bespoke package of services designed to both minimise your tax liabilities and support you as you run and grow your company.

Black and White Accounting offers Accounts & Tax, Book Keeping & Payroll, Business Planning and Software Training to Limited Companies in Surrey, Hampshire and surrounding areas.

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    Company tax return

    How is a company taxed?

    Limited company tax is called “corporation tax”. Corporation tax is currently charged at a rate of 19% of your company’s annual profits.

    There is a very wide range of limited company expenses you can claim against however please be aware that not all expenses are allowable or fully allowable. During times in which your company makes particularly large investments in its future, it may be wise to spread those investments over two or more years to take full advantages of allowances and reliefs to which your business is entitled.

    For more information on which allowances, reliefs, and claims your company can benefit from, speak with a Black & White Accounting team member so please email us on [email protected] or call us on 0800 140 4644 today.

    File Company Accounts

    Corporation tax returns together with accounts are filed once a year using a CT600 form.

    Accounts must be filed and any due tax paid no later than nine months after your company’s year end. Although the personal tax year is always 6th April to 5th April, you can choose your company’s start and end months.

    Please be aware that, at the end of your first year trading, you will likely have to make two CT600 submissions – one covering the full year and one covering the remaining weeks in the last month. Thereafter, you will only have one CT600 per annum to file, assuming there is no change in the accounting year end.

    Accounting periods can be shortened or lengthened, but there are special rules you have to be careful with, so we suggest you speak with us before you do this.

    Limited companies are also required to submit their accounts to Companies House. There are other Companies House requirements too including the submission of confirmation statements, previously known as annual returns.

    Limited company accountant FAQs

    Limited definition

    A private limited company is either “limited by shares” or “limited by guarantee”. If your business has been established to make a profit, you must select a company which is limited by shares.

    Private limited companies are incorporated at Companies House. A limited company is a “legal person” and it is a completely separate entity from you and other shareholders in law. Limited companies may enter into their own legal agreements, they can take out loans, and they can sign contracts (for example like the lease on an office).

    If a private limited company ceases trading, its creditors can approach the directors for recourse however, notwithstanding the presence of a personal guarantee, that recourse is limited to the value of a director’s shares in the business. So, if the value of those shares is £10, the director may only be pursued for a maximum of £10 (as long as the business was not wrongfully trading of course).

    How are directors paid?

    Shareholding directors often pay themselves using a mixture of salary and dividends for tax planning reasons. When done correctly, the amount of tax payable by a director will be minimal compared to a sole trader or someone who is employed.

    If you earn less than £10,000 in dividends, you must contact HMRC to inform them of this and they will update your tax code accordingly. However, if you earn more than £10,000, you must file a self assessment tax returns with HMRC each year. Some individuals file a self-assessment tax return each year even if they earn less than £10,000 in dividends as it can be simpler.

    Setting up a limited company

    You can register as a limited company at Companies House, by using Black and White Accounting, or by using one of the many company formation specialist firms.

    You will then be issued with both a company registration number and a UTR (unique taxpayer reference) for your business. The UTR is the code used by HMRC for corporation tax purposes to uniquely identify the company and thus make payments to HMRC. Similarly, with Companies House you will be issued an authorisation number, which is a six-digit alphanumeric code. This enables us to submit accounts on your behalf to Companies house and make other filings such as change directors, change shareholders, file confirmation statements and change the length of the period of accounts.

    The next key step is to set up a limited company bank account in order to keep everything between yourself and the company separate, before you can have the fun of ordering stationery, domain names and whatever else you want to include your brand identity on.

    Limited companies and other taxes

    Even though a limited company is a legal person, its shareholders and directors are responsible for ensuring that corporation tax and all other taxes are paid in full and on time (subject to an HMRC “time to pay” arrangement). As with sole traders and partnerships, Limited companies must currently register for VAT if their turnover exceeds £85,000 or it is likely to exceed £85,000. There are different VAT schemes available, depending on type of business and level of turnover. Please contact us to discuss this further.

    Limited companies may also be responsible for VAT, the collection of PAYE and workplace pensions for staff, non-domestic business rates, and more. Please check with us today to find out more.

    Limited company accounting software

    Why not make your journey through the complex world of limited companies easier by using accounting software? Bank fees, auto-reconciliation, debtor management and reporting will bring your financial performance to life in a way that ledger books and excel cannot, quicker and more easily for you.

    Not only are we Gold partners of Xero, we are also certified partners of QuickBooks and Sage and work with FreeAgent and Wave, to name but a few. We work exactly how you want to work, so whatever software solution you want, we can deliver through set up, training, implementation through to continued support.

    Self-Employed vs limited company

    Although there is no hard and fast rule governing when it makes more financial sense for a self-employed person to carry out their trading activities as a limited company, those earning £30,000 or more should seek professional advice on their options. We’d be delighted to assist you here, so please email us on [email protected] or call us on 0800 140 4644 to find out more.

    Setting up a limited company for contracting

    In order to take home more pay from the contracts they’re working on, many contractors forego using an umbrella company and they choose to set up a limited company instead.

    Although there is more paperwork to complete as a limited company director, the amount that can be saved by making the transition can be substantial through a combination of being paid in salary and dividends and not having to pay umbrella company fees, subject to IR35 compliance.

    You should ask a professional for advice on which method would be more tax efficient given your historic earnings, especially here where the legislation and tax cases are fast moving. Please talk to us today to find out more.

    What are the key advantages of a Limited Company?

    The key pros of a Limited Company include:

    • Due to limitation of liability the Directors personal finances are protected if the business fails;
    • Generally, more favourable tax regime, especially were profits exceed £30,000 or Director is already a higher rate tax-payer, with additional tax planning opportunities, including pensions;
    • Likely to give the business an enhanced reputation, so they can win more and bigger contracts; and
    • Can have greater access to capital to help accelerate growth.

    What are the key disadvantages of a Limited Company?

    The key cons of a Limited Company include:

    • They are more complex to be set up and administer, with a higher regulatory burden, although your Accountant can help you with all of this (at a cost). Similarly, they are difficult to close down, especially without a good shareholder agreement;
    • You may be accountable to shareholders and other investors, depending how your structure evolves;
    • You have more of your information in the public domain (although this can be restricted to a minimum) about Directors and Limited Company Accounts; and If profits are very high, can lead to being taxed at 19% (corporation tax) and up to 45% (additional rate of corporation tax), without a clever Accountant to help you.

    Limited company accountants in Hampshire and Surrey

    Let us get to know you, your company and what you want for yourself personally, professionally, and financially over the coming years. We’ll work with you to help you achieve the goals that you’ve set for yourself in the shortest time possible with the minimum amount of friction along the way. Our complete package of Accounts & Tax, Book Keeping & Payroll, Business Planning and Software Training will ensure you have a business partner you can rely on, not just today but into the future.

    After our meeting, we’ll put together a bespoke quote for you on a range of services for you, which can save you time and money, make your company more efficient, and help you plan for bright future.

    To arrange your free hour’s consultation, please fill in the form on the page, call us free on 0800 140 4644, or email [email protected].

     

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