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Accounts And Tax Returns For Private Limited Companies

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Tuesday 10th September 2019 No Comments »
Accounts And Tax Returns For Private Limited Companies

Overview

At the end of its financial year, your limited company must prepare full (‘statutory’) annual accounts. You then use this information to:

  • Send accounts to Companies House
  • Send a Company Tax Return to HM Revenue & Customs (HMRC)
  • Pay Corporation Tax – or tell HMRC that your limited company doesn’t owe any
Action Deadline
File annual accounts with Companies House 9 months after your company’s financial year ends
File a Company Tax Return 12 months after your company’s financial year ends
Pay Corporation Tax 9 months and 1 day after your company’s financial year ends

These deadlines are for private limited companies.

New and dormant companies

You must take additional steps:

  • At the end of your company’s first year
  • If you restart a dormant company

Prepare annual accounts

After the end of your company’s financial year, you must prepare annual accounts – called ‘statutory accounts’ – from the company’s financial records. You must always send copies of the statutory accounts to:

  • All shareholders
  • People who can go to the company’s general meetings
  • HM Revenue & Customs (HMRC) as part of your Company Tax Return
  • Companies House (unless you send ‘abbreviated’ accounts – see below)

How to put together your company’s statutory accounts

Statutory accounts must include:

  • A ‘balance sheet’, which shows the value of everything the company owns and is owed on the last day of the financial year
  • A ‘profit and loss account’, which shows the company’s sales, running costs and the profit or loss it has made over the financial year
  • Notes about the accounts
  • A director’s report
  • An auditor’s report

A director must sign the balance sheet and their name must be printed on it.

Accounting standards

Your statutory accounts must meet either:

  • International Financial Reporting Standards
  • UK Generally Accepted Accounting Practice

You can use accountants or tax advisers to make sure your accounts meet the standards.

Small companies, audit exemption and abbreviated accounts

Your company will be ‘small’ if it meets 2 of the conditions below:

  • Its turnover is less than £6.5 million
  • It has less than £3.26 million on its balance sheet
  • It has fewer than 50 employees

If your company meets the legal requirements for ‘small’ companies, you can:

  • Send shorter (‘abbreviated’) accounts to Companies House created from the statutory accounts – this means less information about your company will be publicly available
  • Use the exemption so your company’s accounts don’t need to be audited
  • Choose not to file a copy of the director’s report

Abbreviated accounts

Abbreviated accounts are the balance sheet from the company’s statutory accounts. The balance sheet must be signed by a director and their name must be printed on it.

You must still send full ‘statutory’ accounts to shareholders and to HMRC with your Company Tax Return.

Prepare a Company Tax Return

You must send a Company Tax Return online to tell HM Revenue & Customs (HMRC) how much Corporation Tax your company needs to pay on its profits.

The Company Tax Return includes:

  • Form CT600
  • Corporation Tax calculations (and supporting documents if you’re asked for them)
  • Your company’s statutory accounts

Information you’ll need

You’ll need to give details including:

  • Capital allowances you want to claim for business assets you’ve bought
  • Gains on assets that you’ve sold for more than you paid for them
  • Directors’ loans not repaid at the end of the company’s financial year
  • Repaid directors’ loans you want to reclaim tax for
  • Research and Development Relief you want to claim
  • Any losses that you ‘carry forward’ from your previous accounting period

HMRC has detailed guidance on everything you need to include on your Company Tax Return.

If you made a loss

A loss will reduce your Corporation Tax bill. But if you’ve made losses that you can’t claim back in one tax return because they’re too large, you can either:

  • Claim the loss against your previous year’s profit – you may get a repayment of Corporation Tax if you do this
  • Claim the loss in future financial years (if your company carries on the same type of trade)

To claim the loss against your previous year’s profit either:

  • Fill in the appropriate box on your Company Tax Return
  • write to your HMRC Corporation Tax office up to 2 years after the end of the financial year when you made the loss

Repayments

You tell HMRC how to make repayments when you complete your Company Tax Return.

You might not get a repayment if your company owes HMRC for other taxes.

File your accounts and Company Tax Return

If your accounts and Company Tax Return cover the same period, you can send them to both Companies House and HM Revenue & Customs (HMRC) at the same time.

If you’re sending your company’s first accounts, you’ll usually need to send more than 1 Company Tax Return.

You need your:

  • HMRC online Corporation Tax account details
  • Company registration number
  • Companies House online account details
  • Statutory accounts

Sending your accounts and Company Tax Return at the same time

You can send them using accounting software or HMRC’s free online service.

HMRC’s free online service

  1. Log in to your Corporation Tax Online account
  2. Choose the link ‘File a return and accounts’
  3. Download the CT600 form and the joint filing accounts template and follow the instructions

Sending only your Company Tax Return to HMRC

You must do this online, using either:

  • HMRC’s Corporation Tax Online service
  • Accounting software that can send your Company Tax Return to HMRC

Sending only accounts to Companies House

You can send your company accounts online.

Using accountants or tax advisers to send your returns and accounts

To authorise them for HMRC, either:

  • Download and fill in a ‘Form 64-8: Authorising your agent’
  • Authorise them through the Corporation Tax Online service

To deal with Companies House on your behalf, you must authorise your accountant or tax adviser to use your Companies House authentication code.

Corrections and amendments

Your company accounts

You must send amended accounts to Companies House on paper. You must follow specific rules for revised accounts.

Your Company Tax Return

You must usually do this within 12 months of the filing deadline. You can either:

  • Amend your Company Tax Return online
  • Write to your company’s HM Revenue & Customs (HMRC) Corporation Tax office

If you made an error, you should correct it as soon as possible. HMRC may charge you a penalty for errors.

Penalties

Late accounts for Companies House

If you file your annual accounts late with Companies House, your company will get a late filing penalty and the directors could be prosecuted or disqualified.

Delay Penalty
Up to 1 month £150
1 to 3 months £375
3 to 6 months £750
More than 6 months £1,500

The penalties double if your accounts are late 2 years in a row.

You can appeal against a late filing penalty, but the appeal will only be successful if you can show that the circumstances are exceptional.

Get an extension

You can apply for an extension if both:

  • An unforeseen event outside of your control stops you from sending your accounts
  • You apply before the filing deadline

Email or write to Companies House, explaining what’s happened and how long you’ll need to file your accounts.

Companies House
enquiries@companies-house.gov.uk
Companies House
Crown Way
Cardiff
CF14 3UZ

Late Company Tax Return

Time after the deadline Penalty
1 day late £100
3 months late Another £100
6 months late HMRC will estimate your company’s tax bill and add a penalty of 10% the unpaid tax
12 months late Another 10% of any unpaid tax

If your returns are late 3 times in a row, the £100 penalties are increased to £500 each.

More than 6 months late

If your Company Tax Return is 6 months late, HMRC will write telling you how much Corporation Tax they think you must pay. This is called a ‘tax determination’. You can’t appeal against it. You must pay the Corporation Tax due and send your Company Tax Return. HMRC will recalculate the interest and penalties you need to pay.

Appeals

You can appeal to HMRC against a late filing penalty if you have a ‘reasonable excuse’. If you have a ‘reasonable excuse’, you can appeal against a penalty by writing to your company’s Corporation Tax office.

At Bizorb we aim to provide the most accurate and up to date information to you. This article contains public sector information licensed under the Open Government Licence v1.0. If you spot any errors in this article please let us know.

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