Limited Company

A. LIMITED LIABILITY

The difference between being a sole trader and a ltd company is that you have limited liability on any losses made. (only liable according to the value of the shares you have)

B. LESS TAX TO PAY

2020-21 As a Ltd Co you pay 19% on profits up to £300,000

2020-21 As a Sole Trader you pay 20% on profits between £12,501 to £50,000 (you pay tax on £37,500) and then 40% on profits between £50,000 and £150,000 and 45% above £150,000

A. MORE COSTS

A few start-up costs (approx £30)

Every year we update your company details at Companies House for £13

More accountancy costs (view our costs. It’s all relative to your turnover and the costs are fair and are inclusive)

Our prices start at £500 if your turnover is up to £40k and from £750 if your turnover is £40k to £100k.

We do all this for you. We use Companies Made Simple. (approx £30)

1. We register you with Companies House
2. We set up the directors and issue shares
3. We get you a document called a memorandum of association
4. You also receive a certificate if incorporation for presenting to bank to open a business account

COMPANY ACCOUNTS – SUBMITTED BY US VIA TAXFILER TO COMPANIES HOUSE

Company accounts must be submitted to Companies House no later than 9 months after year end

Eg if your company accounts run from 1 OCT 2020 TO 30 SEP 2021 the accounts must be submitted by 30 JUN 2022

COMPANY TAX RETURN – SUBMITTED BY US VIA TAXFILER TO HMRC

A form CT600 which is the Corporation tax return which shows the profit made and tax payable does not have to be submitted until 12 months after the year end.

Eg if your company accounts run from 1 OCT 2020 TO 30 SEP 2021 the tax return must be submitted by 30 SEP 2022

TAX TO PAY ON PROFIT – PAID BY YOUR COMPANY TO HMRC

The Corporation Tax which is tax your company has to pay on profit for the year must be paid 9 months and 1 day after the year end

Eg if your company accounts run from 1 OCT 2020 TO 30 SEP 2021 the tax must be paid by 01 JUL 2022

NEW COMPANY

For a newly incorporated company the rules can be different

As a Director of a company you are self-employed and so a return must be completed for your earnings from 06 APR TO 05 APR each year.

From your company this will include any Director’s salary that you have received and any dividends that you have taken.

It will also include any other income you have received such as from another job or from rental income etc

This must be submitted by us within 9 months

E.g. If the tax year is 06 APR 2020 TO 05 APR 2021 this must be submitted by us to HMRC by 31 JAN 2022.

Payments should be made to HMRC on tax due on 31 JAN and 31 JUL each year by yourself NOT via the company