If you're new to running a limited company, it's easy to experience information overload when researching what's required of you; that's why we've simplified things with this concise, easy-to-follow blog post.
As a company director, you must always adhere to the responsibility set out for you in the Company's Act. One of the key details here is that you must always act solely in the interest of the Company. You'll also need to submit annual accounts called director's reports or financial statements. Legally, these need to be a true and fair representation of the financial position of the Company. Annual accounts give details about things like the overall performance of the company, its income, profit, assets and liabilities. Each year, you or your accountant will need to submit them to HMRC and Companies House. HMRC will also ask you for a corporation tax return along with your accounts. Your financial statements will be used as a basis to calculate this return, which will tell HMRC how much tax the company owes.
You also need to submit a confirmation statement to Company's house. This is really simple; it's just a document that notifies them of any changes to shareholders, directors or other key company information, such as the registered office address.
If your limited Company employs personnel, you must ensure that staff are paid correctly. This includes checking that all relevant deductions for NI and taxes are accurate. You'll also have to submit an RTI return to HMRC on every pay date detailing all of this information.
As a company director, you are also required to submit a Self-assessment tax return to HMRC for the income you receive personally from your Limited Company, such as salary, dividends or any benefits in kind.
If you are VAT registered, there will likely be additional returns due every quarter throughout your financial year. These will need to be submitted online using HMRC-recognized software like Xero, which is what we use.
Of course, one of the most important obligations of the director is to ensure that the business is solvent. You must be sure that your business can meet its financial liabilities.
The best thing you can do is implement a regular bookkeeping process from day one. This will ensure you always have the financial information you need for your submissions and will also help your business to stay solvent by providing you with a clear financial overview. We also recommend finding an accountant early on in your financial year. They will have lots of experience in making sure your Company runs efficiently and does not miss any submissions. You'll have deadlines to meet, and if you miss them HMRC or Companies House will issue penalties to your Company. If you need any more information about your obligations when running a limited company, please give us a call or fill in the contact form on our website.
