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Limited Company Tax Return Issue

Limited Company Tax Return Issue

I am in the process of filing my first year accounting period for my limited company and after spending many hours of reading all the information on HMRC’s website and speaking to HMRC on the phone, I am more than a little confused as to what forms I should be filing in addition to the CT600. Am I an employer who employs myself? How can I be self employed and also an employee??

Firstly, enlisting the services of an accountant is not an option for me as I simply can’t afford one but seeing as my accounts are extremely simple and I have done my own tax returns before, I should be able to get my head around this...if someone is kind enough to spare a little time to explain things in basic plain English

Here’s the background: I have been self employed for many years, (sole trader basis, no employees, just me!) And have always done my own book keeping/accounts/tax returns. In April 2011 I had a career change and began working from home as a virtual customer service advisor. The work is provided via a company called Arise. This is on a self employed basis and you must set up a Limited Company. Basically, Arise pay me for the hours I work, paid into my business account, and this is what I use for my wage and to cover any expenses.

I keep my accounts very simple. There are a number of expenses I could claim (percentages of this & that) but don’t because my income is low and so is the amount of tax to pay, so I just don’t see the point in complicating things for the sake of paying a few pounds less in tax.

Accounting period is for 01/04/2011 to 31/03/2012

Revenue 7507.90 - total of all payments received from Arise

Wages 7068.00 - amount paid to self, purposely kept below the employee thresh holds for tax and national insurance, to keep the accounts simple and perfectly acceptable considering the amount of revenue anyway.

Expenses 344.93 - the only expenses claimed are those necessary for me to do my job (computer equipment/software/repairs & printing)

As you can see the accounts are very simple...and income very low, hence the reason why I have to (and want to) do this myself.

So, I have completed the CT600, using the software provided by HMRC. Fairly straight forward, although I was thrown by the ‘accounting policies’ part and probably haven’t done that quite right.

The question now is what other forms do I need to fill in to complete the process? I have received a SA103 but I’m not sure that this is the correct form to file. I have phoned the corporations tax office a few times for advise but based on their information I should be paying contributions for my employees, doing something about directors dividends, filling in self assessments, filing a self employed tax return and requesting employee tax codes (???)

Please, will someone just point me in the right direction, then I can get it right, pay what I need to and forget about it for a year!

  

Replies

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05th Aug 2012 20:54

Seek an accountant

Julie,

Having just completed some work for a client I thought I would just take a quick look at AW as a way of "winding down" and I spotted your query.

I do not have time to look at the scenario in detail but you have apparently misunderstood two fundamental issues:

1) If you operate through a limited company, then you are not self-employed in the normal sense.  In this situation you are likely to be a director, shareholder and employee of the company or just a director and shareholder. 

2) The reporting requirements for a limited company are more rigorous than for a sole trader and compilation of the financial statements and corporation tax submission are not really suited to the uninitiated.

I hope this is useful.

tladirect

 

 

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05th Aug 2012 21:03

Why bother?

"Please, will someone just point me in the right direction, then I can get it right, pay what I need to and forget about it for a year!"

Why work for so little money? If you have to work through a limited company you have to expect to pay to use an accountant. I don't see why you say you should be able to do it yourself when you obviously can't. I had to study and train for years to know what to do. If you broke your leg would you say you should be able to deal with it yourself because it's simple?

Get an accountant. Pay for their expertise to do what is required and then get a job where you don't need an accountant.

 

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By sawales
05th Aug 2012 21:07

Limited company?
I thought a Ltd company had to have a minimum of two directors and each had to file a tax return. That's on top of the Ltd accounts that need to be filled at Companies House by a Chartered Accountant after being audited.

Good luck.

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05th Aug 2012 21:15

Sawales

You thought wrong about everything you said.

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By sawales
06th Aug 2012 09:38

So Sorry....

petersaxton wrote:

You thought wrong about everything you said.

 

Pardon me for breathing im quite sure.....

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06th Aug 2012 09:49

By all means breath

sawales wrote:

petersaxton wrote:

You thought wrong about everything you said.

 

Pardon me for breathing im quite sure.....

but at least make sure you are somewhere near being accurate.

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By Old Greying Accountant
06th Aug 2012 22:51

Be fair, nearly everything ...

petersaxton wrote:

You thought wrong about everything you said.

... the accounts do have to be filed at Companies House :oP

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06th Aug 2012 22:59

I was right!

Old Greying Accountant wrote:

petersaxton wrote:

You thought wrong about everything you said.

... the accounts do have to be filed at Companies House :oP

He said they had to be FILLED at Companies House!

 

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By Old Greying Accountant
06th Aug 2012 23:01

SORRY!

petersaxton wrote:

Old Greying Accountant wrote:

petersaxton wrote:

You thought wrong about everything you said.

... the accounts do have to be filed at Companies House :oP

He said they had to be FILLED at Companies House!

 

I stand corrected, how could I have doubted you?

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By sawales
10th Aug 2012 06:34

So arrogant...

Old Greying Accountant wrote:

petersaxton wrote:

Old Greying Accountant wrote:

petersaxton wrote:

You thought
wrong about everything you said.

... the accounts do have to be filed at Companies House :oP

He said they had to be FILLED at Companies House!

 

I stand corrected, how could I have doubted you?

Two words, arrogant and rude...

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10th Aug 2012 08:50

But..

sawales wrote:
Two words, arrogant and rude...

But slightly amusing?

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05th Aug 2012 21:46

Definitely seek an accountant's advice

Julie,

You have made a number of fundamental errors in setting out the scenario under which you are operating.  An accountant will be able to help you file the required returns, without the need to spend many hours yourself trying to understand information which, as others have pointed out, takes a professional many years to learn. 

The main problem appears to be that the company you work for are insisting that you operate as a limited company.  With a fairly low income, you are not getting any benefit from the limited company in terms of tax savings, especially if you take into account the running costs of the company in terms of accountancy fees.  I would recommend that you speak to Arise to discuss your situation and find out whether there is any option of becoming a sole trader rather than a limited company.  It would save you money, and your accounts would be simpler.

For the limited company, you need to file accounts (prepared on the Accruals basis) with Companies House, and you need to file a CT600 Corporation Tax return with HMRC. 

If you have registered the company as an employer you are required to submit a P35 Employer Annual Return to HMRC, as well as issuing a P60 to yourself as employee each tax year.  The details from the P60 go on to your personal tax return.

Personally, as you are, presumably, a director of the company, you will need to file a self assessment tax return which will include any dividend income or salary that you have received from the company. 

As you can see there are several returns and submissions required, and it is important to seek professional advice to make sure you have done everything correctly, otherwise you run the risk of receiving penalties from HMRC.

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05th Aug 2012 23:19

Thank You

Sparkler,

Thank you for taking the time to post a constructive reply, it is greatly appreciated and has clarified all I needed to know.

Yes, you are quite correct in stating that I am not getting any benefit by being a limited company but that is the way Arise operate, there is no option to be a sole trader.

I have already filed my accounts with Companies House and also filed a CT600 with HMRC.

As far as I’m aware, I have not registered the company as an employer, I should be just director and shareholder. I will clarify this tomorrow and make sure that I do not need to submit a P35 or P60.

And now that I am also aware, that as a director of the company, I need to file a self assessment tax return, I shall do so tomorrow.

So, thank you Sparkler, for pointing me in the right direction. 

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06th Aug 2012 01:55

Contradictory

"Wages 7068.00 - amount paid to self, purposely kept below the employee thresh holds for tax and national insurance"

"I have not registered the company as an employer, I should be just director and shareholder. I will clarify this tomorrow and make sure that I do not need to submit a P35 or P60."

Why do you say you have paid wages to yourself but you have not registered the company as an employer?

Why do you then say: "I should be just director and shareholder". You are an employee if you are being paid wages.

Why are you doing all this messing about for such little money? It doesn't make sense.

You seem to be very defensive about making a bad choice.

 

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06th Aug 2012 16:25

Employer registeration not required

petersaxton wrote:

"Wages 7068.00 - amount paid to self, purposely kept below the employee thresh holds for tax and national insurance"

"I have not registered the company as an employer, I should be just director and shareholder. I will clarify this tomorrow and make sure that I do not need to submit a P35 or P60."

Why do you say you have paid wages to yourself but you have not registered the company as an employer?

Why do you then say: "I should be just director and shareholder". You are an employee if you are being paid wages.

Why are you doing all this messing about for such little money? It doesn't make sense.

You seem to be very defensive about making a bad choice.

 

Actually, I don't need to register as an employer, not only has this been clarified by the corporations tax office today but I also found this on the HMRC website:

As soon as you first employ someone, you will need to register as an employer with HMRC if one or more of the following is true:

1) you're paying them at or above the PAYE threshold

2) the employee already has another job

3) they are receiving a state or company pension

4) you're paying them at or above the National Insurance Lower Earnings Limit

5) you're providing them with employee benefits

Bear in mind that you might need to register as an employer even if you're the only person working in your business. If you run a one-person limited company, you'll be both an employer and an employee. So if any of the conditions above apply to you as an employee you'll need to register.

Since none of the above conditions apply in my circumstances, I don't need to register as an employer and hence no need to submit P35/P60

As for filing an SA, this should definately be done in my case. I am already registered for SA and have filed such many times previously so this is not an issue for me.

And as for your comments on your posts, well everyone is entitled to their own opinion no matter how arrogant it may come across. I don't 'work for so little money', I choose to work little for the money I actually need, I no longer have a mortgage and enjoy a simple life, I earn only what I need to so I can live the life I want to. To me spending time doing what I want to do is far more important than spending it earning more money. Of course, I could work a little more to cover the costs of an accountant but why do that when I have the time and determination to do this myself...to me that 'doesn't make sense'.

Maybe you see this as a 'bad choice' from your perspective, and no doubt other's may think it a little unwise but with a little help and constructive advise, people are indeed capable of acheiving the things that some assume they can't.

 

 

 

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By Jenni
06th Aug 2012 16:50

The "you're providing them

The "you're providing them with employee benefits" might be an issue depending on the expenses as I mentioned in my post. Better to check than to be fined :-)

"I choose to work little for the money I actually need" - Good for you, too many only care about the cash and what they can spend it on, enjoy your family/life etc. Not a bad choice in anyway (though I think the poster meant about setting up as a Ltd company rather than Self employed was the bad choice, but, as you say, that wasn't your choice).

 

 

 

 

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06th Aug 2012 07:07

One thing

Good advice from julie.  However, although the HMRC website and other government websites say all company directors must file SA returns, this is not the case.  There are a couple of very long threads on this site - and others! - where in the end no-one was able to point to a piece of LAW - as opposed to something on a dodgy website such as the HMRC one! - which said this.

 

My advice to clients in your position - no extra tax to declare, no refund - is not to register for self-assessment with the hassle and extra accountancy fees / effort which this involves.  My advice to all potential clients who have already formed limited companies is not to attempt to file their own returns with HMRC and Companies House unless they first learn the Companies Act and Corporation Taxes Act requirements for doing so.

Mistakes here can be very expensive.

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06th Aug 2012 08:50

I have not come across the other threads on this subject, but have not heard of a self assessment tax return not being required for a company director.  The HMRC website is fairly clear on this point - http://www.hmrc.gov.uk/sa/need-tax-return.htm#1

Who needs to complete a tax return?

The most common reasons for needing to fill in a tax return are listed below.

Company directors, ministers, Lloyd's names or members

You must complete a return if you're any of the following:

a company director (unless you're a director of a non-profit organisation, for example a charity, and don't receive any payments or benefits)a minister of religion (any faith)a name or member of Lloyd's

If there are no dividends involved, and therefore no additional tax to declare or have refunded, then the self assessment tax return is pretty easy to complete even for a novice - and the OP explains that she has done a SA tax return for herself previously.  I have a number of clients who use my services for the limited company accounts and returns but prefer to fill in their own self assessment return.

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13th Aug 2012 23:33

Director's tax return

Well, I for one have at least one director who's received a letter saying she no longer needs to submit a return.

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13th Aug 2012 23:41

Sent in error?

Virtually each letter we get saying that is an error

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06th Aug 2012 08:56

Sparkler

Did you read what Mr Mischief wrote?

He acknowledged that the HMRC website says that directors have to complete self assessment tax returns but explains that there is no legal basis for this requirement.

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06th Aug 2012 09:00

yep!

If I set aside the morning for it, I could probably find you at least 100 cases where the HMRC website is crystal clear about something but it's actually 100% undiluted drivel!

In my view, deliberate misinformation is a major plank in HMRC's revenue maximisation strategy.

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By dstickl
06th Aug 2012 10:07

@mr. mischief:Wud U support campaign 4 an E2E ST & CIS Teach-In?

mr. mischief wrote:

....    In my view, deliberate misinformation is a major plank in HMRC's revenue maximisation strategy.

Hi mr. mischief!   Whilst you may be right in your quote above, if it's correct then I find such a public service stance very sad, and indicative of a sustained lack of grip by HMG's Treasury Ministers of the 3 parties of: Labour / Liberal-Dogmacrats / Tory.

As part of my efforts to stop the rot [ReYrQut] I'm currently trying to get my MP to get an End-to-End (E2E) teaching (Teach-In) pack from HMRC, for presentation to trainee Plasterers and/or Tilers, showing worked examples - for Sole Trader (ST) and/or CIS situations - starting with Paid Invoices or Cash Receipts, and Receipts for expenses, going via actual filling of actual HMRC forms for Income Tax, and also actual HMRC forms for National Insurance Contributions, going all the way through to actual forms and payment of same, together with an approved HMRC timetable of same.

The situation so far is that no significant material progress has been made, for me to have in my hand a pack that I could hand out to a 15 strong class of seventeen year olds etc, who are trainee Plasterers and/or Tilers, and who may perhaps have an IQ of around 80 or 90, and may perhaps have a reading and or writing age of 12.  

Naturally, some of them have a terror of tax.  Inevitably, they may be tempted to work on the black, as HMRC seems to me IMHO to be incapable of teaching them young!    I find the whole situation straight out of Monty Python.    I also believe that it explains why "chancer" immigrants come from abroad to do cash in hand jobs, and then scarper when HMRC is sighted!

SUM-UP QUESTION:  Would you - or any other reader on AWEB - be interested, please, to support my campaign for an E2E ST & CIS Teach-In pack, for disadvantaged school leavers, who are potential hard grafters?

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08th Aug 2012 11:57

Youngster on CIS

I agree entirely, as I have completed a PTTLS (preparing to teach in life long learing) and started a PGCE on this very basis, but trying to get the local college to take me on to do a few or even one session with the said youngsters, was nigh on impossible as the college lecturers did not seem to understand tax at all!

When I did a practice session with my own class of would be lectures on how basic PAYE & NIC worked not one of them had a clue, this was a class of various "grown ups" lecturing accross the board, who had been employed for many years. None of them had a clue what their tax code was based on?????

 

Although I think you do the Youngsters an injustice by "who may perhaps have an IQ of around 80 or 90, and may perhaps have a reading and or writing age of 12" as alot of building trades people I see day to day in practice, IQ & ability are way above this to run sucessful businesses!   In fact I have recently in my forties discovered I'm dyslexic

 

In fact I have recently discovered I'm Dyslexic in my forties, which explains a lot of why I struggled in school & college with english etc, but was always top set maths!

 

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08th Aug 2012 13:46

SUM-UP QUESTION: CIS Teach-In

#next_pages_container { width: 5px; hight: 5px; position: absolute; top: -100px; left: -100px; z-index: 2147483647 !important; }
Hello Mr Mischief

A really good idea that appears to be too hard for the HMRC teams.  I have a practice in Telford, Shropshire that specialises in the smaller (micro) business or the start-Up, many of my clients are working as self-employed in most of the building trades, some of them subject to CIS deductions and some not.

I would be happy to assist in the formation of such a pack.  Depending upon where you are based I would also be happy to visit and discuss this with you, I do have C&G teaching qualifications for further education with a few years experience and was involved in the accreditation of courses for the special needs area of the college.

I am involved in a second business creating accounting software.  My business partner and I have written an extremely simple software system for completing bookkeeping, the system needs an advisor/accountant's involvement.  Please have a look at www.taxterrier.co.uk currently this is in the pdf format and we are in the process of re-writting the whole program to make it even easier for the client to use.  The plan in the near future is to market the program to accountants/tax advisors.  The ease of use and the room for error of input are such that the accountants time needed to prepare the accounts etc are greatly reduced so that without too much of a stretch a single person practice can comfortably have about 300 clients, I have a few more than that.  The usual average is about 100-120 and then the practice is overworked.

[email protected]

 

 

 

 

 

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By dstickl
08th Aug 2012 19:31

@Ann Lovatt, @petergosling:Teach-In pack for ST & CIS teenager

petergosling at taxterrier wrote:

...   A really good idea that appears to be too hard for the HMRC teams.  ....

Hi Ann Lovatt and Peter Gosling!   I'm trying to counter the apparent HMRC cynicism, identified earlier by another AWEB poster earlier.   Hence my [admittedly slightly "off topic"] suggestion posted earlier on this thread on Monday, 06/08/2012 - 10:07am.

Thanks for your kind support for my campaign, for a "Teach-In pack for ST & CIS teenager" apprentices, so that they can get a good start in their business lives. 

I've PM'ed both of you.   But IF any other AWEB reader wishes to join in with this campaign, THEN please also PM me ...

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06th Aug 2012 11:50

Fair enough, a tax return isn't required in law, but I would be hesitant in suggesting to the OP, who does not intend to use the services of a professional, that she simply does not bother to file a tax return, as she may find it difficult to argue the case for not having filed one with HMRC.  As she has completed SA tax returns to date, I imagine she is probably still registered for self assessment, and it may be a tricky conversation with HMRC for her to deregister - "I used to be self employed, but now I am a company director so by law I don't need to file a tax return".

 

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06th Aug 2012 14:15

My view

If the OP is asked to file a tax return I would recommend she does so.

I would always recommend that an SA1 is completed and submitted or an online registration is submitted if the following indicates it is needed.

http://www.hmrc.gov.uk/sa/need-tax-return.htm

I've had many clients who had needed to complete a tax return and after a year or two HMRC have said it was not needed.

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By Jenni
06th Aug 2012 16:25

You mentioned expenses and one of them was a computer. You can't claim the whole cost of it only it's Depreciation (see: http://www.hmrc.gov.uk/capital_allowances/investmentschemes.htm) and you also may need to complete a P11D. (A P11D is a return of expenses and benefits.  A benefit can arise when you refund an employee through expenses or if you pay something directly on behalf of an employee.  (By employee, I also mean director in this instance).   In some cases, you may have to report expenses reimbursed even if this is not eventually taxable on the employee, and they then have to reclaim it on their tax return. However, if an employee makes a payment on the employer’s behalf, this does not need to be reported.  In the simplest instance this would cover purchases of stationery for the company etc.  So items such as insurance or a laptop which were reimbursed to you are not taxable or reportable so long as they are wholly for business purposes and for the company because they are not deemed to provide the employee with earnings / expenses.  Also, travel costs reimbursed to you are a special case and are not taxable and do not have to be reported.  (Travel costs can be quite complex, but broadly travel to a temporary workplace is not taxable or reportable).  Mobile phone costs are more complicated and it depends who the contract is with and who pays.  This is explained clearly in the following link:  http://www.hmrc.gov.uk/paye/exb/a-z/t/telephones-mobile.htm.  I am not entirely sure which situation applies to you.

If you do have to prepare any P11D information, I this can be done online as part of your employer PAYE online services which you really should have signed up for, I think within 3 months of becoming an employer (which you are!).

You also might have to apportion profit between the two corporation tax years if your accounting period spans them (FY2010, which started on 1 April 2010 and FY2011 which started on 1 April 2011) and apply the relevant tax rate for each year.  The tax rate in the year 1 April 2010 – 31 March 2011 was 21% and not 20%.

As mentioned by others, you really do need an accountant to help with this. If cost is a huge issue, try your local business link http://www.businesslink.gov.uk who are very helpful, CAB might also be able to help. You may have collected fines already for example for not registering as an employer, maybe not completing a New Company Details form for Corporation Tax (see: http://www.hmrc.gov.uk/ct/ for details) but these fine can be reduced - even to zero - if you tell HMRC about them before they find out! See the checklist at http://www.hmrc.gov.uk/startingup/index.htm to see a what you might not have done. Be honest with them and they can be very understanding.

 

Hope that helps,

 

Good luck

 

 

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06th Aug 2012 16:52

Thank You Jenni

...for your constructive advise.

As for expenses, I'm not actually claiming for the computer itself as I already owned this prior to setting up the company. I have only claimed for those items absolutely necessary to the job I do, such as a second monitor, some required software and a little printing/stationary costs. I did run these by HMRC and they informed me that they are all expenses I can claim in full. I know that as regards expenses there are lots of additional aspects that could be used to reduce tax but I feel that this would be a little dishonest and unnecessary given my circumstances. The amount of tax I incur is so small anyway that I see no need to reduce it any further, even if I'm entitled to do so.

Yes, I agree that HMRC are very understanding, they have been very helpful but I did find their advise a bit conflicting, hence why I came on here. Thanks to those kind enough to spend their time giving helpful advise, I have a far clearer picture of what I need to do so I am now actually enjoying the process!

 

 

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06th Aug 2012 17:25

You should register as an employer

"Wages 7068.00 - amount paid to self, purposely kept below the employee thresh holds for tax and national insurance, to keep the accounts simple and perfectly acceptable considering the amount of revenue anyway."

"4) you're paying them at or above the National Insurance Lower Earnings Limit"

"Since none of the above conditions apply in my circumstances, I don't need to register as an employer and hence no need to submit P35/P60"

Lower earnings limit for NIC for 2011-2012 is £102 per week which is £5,304.

This means you should have registered as an employer and submitted a P35 and P14.

 

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06th Aug 2012 20:06

Above the LEL limit

This just goes to show why it's important for an individual to check the advise given by HMRC! I specifically told them the amount I had taken as a wage and they said because it was under NI/Tax thresholds and therefore I did not need to register as an employer.

Now it is clear thanks to Mr Saxton (much appreciated). Yes, I may well be under the threshold rates for employers contributions but not those that would exempt me from registering as an employer.

The only problem now is that according to HMRC website the deadline for submitting a P35 & P14 was 19th May. Obviously a letter of explanation to HMRC is now also on my list of 'to do'.

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06th Aug 2012 20:35

Fine?

You know there is a £100 per month late fine for this? If you think a letter to HMRC will stop this, good luck.

I am interested to know how you have managed to file using HMRCs website for the CT600 wihtout using IXBRL approved software of spreadsheet tagging, which is now mandatory and fairly expensive. Serioulsy if you know a way of doing this I would love to know. Have you actually pressed send and got an email acknowledgement of receipt? Have you filed with Companies House?

 

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06th Aug 2012 21:31

CT600 filing

HMRC provide a free online filing software that ensures that everything is done in the right format. I found it easy to use and yes, I did actually press send and receive a confirmation email. It's aimed at smaller companies with less complex affairs. You can also use it to file with companies house, however I didn't do this as my accounting periods are different so it was easier for me to file with companies house directly. You need to register for HMRC online corporation tax service then you can download the software. There's lots of info on the Corporation Tax section of HMRC website, you'll need to click around a fair bit because not all you need to know is in one place on their site, as I'm sure you're aware but this is a good starting page http://www.hmrc.gov.uk/ct/ct-online/file-return/online.htm 

I am unfortunately, well aware of penalty amounts and under no illusion that a single letter will stop it but I am prepared to challenge it all the way...one can only but try!

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06th Aug 2012 20:14

Who's reliable

HMRC advice: bad

Accountant advice: good

This is why you can't rely on HMRC. They have been getting rid of the experienced staff because they cost too much and now they rely on untrained monkeys because they are cheaper.

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06th Aug 2012 20:17

Oh yes they do

"travel costs reimbursed to you are a special case and are not taxable and do not have to be reported."

That's wrong. They do have to be reported.

http://www.hmrc.gov.uk/paye/exb/a-z/t/travel.htm#1

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06th Aug 2012 21:37

It is the same

"Accounting period is for 01/04/2011 to 31/03/2012"

Isn't that the same for Companies House and HMRC?

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06th Aug 2012 22:01

Different account periods

A company has to be set up prior to Arise even accepting a person onto their training course (ridiculous because if anyone fails the course then they have set up a company for absolutely nothing!) So the accounting period with companies house actually starts 3 months before the HMRC one. Originally they were both the same but I changed the HMRC one to bring it in line with the time I actually began to receive an income. Of course, I could have left them the same and taken a wage from the start of the company which effectively would have meant that the company was at a loss this year and no tax to pay at all. But I was still working as self employed and earning during those 3 months of training, so it was easier for me to change the HMRC period to fall in line more or less with the end of my self employment.

Companies house class your accounting period as starting from the last day of the month in which the company was formed, wether you were trading or not. HMRC will amend your accounting period to one in which you actually started trading

 

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06th Aug 2012 21:39

?

Hi Julie, we use this site literally all day long but need to attach ixbrl tagged spreadsheets. I believe theres an option to enter everything individually which i think it was you must have done. That would be too time consuming with the volume we have to file.

I may be wrong but I thought other the accounts with both had to be the same period.

 

Are you aware of the rules for paying dividends and the optimum wage for tax reasons?

 

 

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06th Aug 2012 22:16

IXBRL tagged spreedsheets

No need to use these in my case, as yes, I do enter everything individually. Not a problem for me as the accounts are so simple but would no doubt be a nightmare for more complicated financial affairs. It was because of this software option that I chose to file my own accounts (and the overly optimistic advice from HMRC that I should have no problems filing my own returns!). If this software option wasn't available then I wouldn't have even attempted to do things myself, I looked into ixbrl and decided life's far too short for that one!

I did look into the rules of dividends & optimum wage but there isn't enough revenue for me to go down this route anyway.

 

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06th Aug 2012 22:02

HMRC accounting period

The HMRC accounting period doesn't start until trading starts.

 

 

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06th Aug 2012 22:07

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Julie, I am not sure who is advising you but you sound very confused. Your accounting period is what it is and should be the same with both. You need to change one and there are various rules which i wont go into on here. The point of the accounts on companies house is that they are public searchable record and should be a reflection of your accounting period and should be the same as hmrc. I dont think people are trying to have a dig at you on here but you may not realise what you dont know, if that makes sense.

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06th Aug 2012 22:33

confused ?

I spoke with companies house regarding the accounting periods. They state that my accounting period with them starts on the last day of the month in which the company was formed, regardless of wether the company was trading or not and that this did not have any impact on the HMRC accounting period.

Initially the accounting period with HMRC was the same and I could have classed the company as trading during the period I was actually in training. I chose to amend the trading period with HMRC (and by their recommendation) to the time when I actually began bringing a revenue into the company, for the reasons stated previously.

 

 

 

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06th Aug 2012 22:40

Wrong

"I spoke with companies house regarding the accounting periods. They state that my accounting period with them starts on the last day of the month in which the company was formed, regardless of wether the company was trading or not and that this did not have any impact on the HMRC accounting period."

That's wrong.

The accounting period with them ENDS on the last day of the month in which the company was formed!

"For all new companies, the legislation sets the first accounting reference date as the last day in the month in which its first anniversary falls."

http://www.companieshouse.gov.uk/about/gbhtml/gp2.shtml#ch2

You seem to be talking to a lot of people who are supposed to be giving you wrong information. Are you sure you are not getting confused during these phone calls?

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06th Aug 2012 22:52

Something must be wrong

because Companies house have given me an accounting period of 31.01.11 to 20.01.12 with a dealine of 20.10.12.

And it's not a case of getting confused during these calls as I write down everything. I also have the above in black & white from companies house.

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06th Aug 2012 23:00

ARD given by Companies House is always the end of the month

"because Companies house have given me an accounting period of 31.01.11 to 20.01.12 with a dealine of 20.10.12."

Companies House wouldn't give you an ARD that isn't the end of a month.

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06th Aug 2012 23:15

Definately a wrong ARD

I thought it was odd to have accounts ending on the 20th of the month. But that's exactly what it states on their letter and that's what the advisor confirmed when I spoke to them today (not her fault I guess, just reading what was on the system no doubt). There is obviously an error so I will need to ring them again tomorrow and sort this out.

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By Old Greying Accountant
06th Aug 2012 23:25

Peter beat me to it ...

... whilst I was apologising!

When a company is formed, its natural first period will be 12 months from the end of the month of incorporation.

The first account are due to be FILED withing 21 months of that date, and 9 months from the year end thereafter.

You can change the year end, and that will affect all filing deasdlines except the first which is set in stone.

I presume your accounting period is 20/01/11 - 31/01/12

Your CT periods will be set automatically by HMRC as 20/01/11 - 19/01/12 and 20/01/12 - 31/01/12 until you tell them different, as an accounting period for CT cannot exceed 12 months. CT is due with 9 months and 1 day, but the CT600 and accounts are due 12 months from the end of the Companies House accounting period (as far as you need worry).

You could change your Companies House accounting period to 31st March 2012, but you will not be able to extend it again for 5 years, although you could shorten it. The accounts will still be due by 20/10/12 though, although 31st December annually thereafter.

If you do that first you can then write to HMRC and tell them.

With regards to HMRC, they will accept what accounting period you tell them, but the period you have filed does not equate to te comapnies actual period. Ifthose accounts submitted cover the 2011 financial year (to 31st March 2012) you will need to either prepare a new set justto 31st January 2012, or better, change your year end to 31st March 2012 as that will solve the problem easily. You can do this online at Companies House (and can also file the accounts there online) You will need to register with them and get an online filing reference and an authentication code to do so.

 

 

 

 

 

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06th Aug 2012 23:23

The best way to solve this

Julie

What is the name of the company?

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By Old Greying Accountant
06th Aug 2012 23:44

I amaze myself sometimes.

Julie, your year end at Companies House is 31st March 2012, your accounts are due 31st October 2012.

You are getting muddled up with your Annual Return, this is due annually and need to be made up to 20th January annually, and had to be filed with 28days of that date with the filing fee of £14 online, £40 on paper. This is not the accounts (or financial statements as they are also called)

The accounting period must have been lengthened as it would originally have been 31st January, seeing as you were incorporated 20/01/2011.

What I don't understand is why the accounts are not due by 20th October 2012, and I would get them filed before then just in case.

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