When you decide to form a limited company you are creating a separate legal entity with its own legal framework and accountabilities. Any profits or losses incurred belong to the company. So, when you’re managing the company you need to treat it as a separate entity. Even if you’re the sole director and sole shareholder, you must always act on behalf of the company and as a limited company director, you have certain responsibilities.
What do I need to file and when as a limited company director?
Confirmation statement for limited company
Not to be confused with your annual accounts, which contain mainly financial information, your Confirmation Statement provides information about your company, its directors, and other administrative arrangements. It also contains information about ‘Persons of Significant Control’ involved with your business. You must file a Confirmation Statement at least once per year. You can file more than one in a 12-month period if information about your company has changed and be aware it’s a criminal offence not to file your statement!
Corporation tax payment
If your company made a profit in the accounting period, then you will likely need to pay Corporation Tax to HMRC. Any Corporation Tax due must be paid by nine months and one day after the end of the Accounting Period. Your first Corporation Tax return is due 12 months after your first-year end, and then each year within 12 months of your Accounting Period end.
National insurance for limited company
National Insurance (NI) will need to be paid if you earn a salary over the Primary Threshold of £9,568 a year, which is £797 per month or £184 a week (based on 2021/22 figures). However, if you pay yourself above the NI Primary Threshold, you will have to pay the Employee’s NI. If you pay yourself (or any employees or other directors) over the Secondary Threshold which is set at £8,840 a year for the 2020/21 tax year (£737 per month, or £170 per week) then your company will have to pay Employer’s NI.
P60
This is a summary of the amount of salary you’ve been paid through your limited company, and the tax that’s been deducted from it in the tax year.
P11D
Form P11D summarises the value of any benefits and expenses provided to directors and employees in a tax year (6th April – 5th April). Details are required for all directors and employees, so even if your company only has one director (i.e. you), you still have to file a Form P11D with HMRC and keep a personal copy for your own records.
PAYE
PAYE information is usually submitted to HMRC monthly.
Self Assessment
The director of a limited company must submit an annual Self Assessment of their personal income and allowances to HMRC. The Self Assessment or personal tax return includes details of your income from employment, dividends paid to you by your company and any other sources such as rental income or sole trader income. Personal tax returns are due by 31st January each year. However, we advise that you complete your return sooner rather than later. You can usually file as soon as you have your P60 from the relevant tax year.
VAT Return for limited company
At the end of every quarter, or in some cases annually, a VAT registered business or limited company must add up all the VAT they’ve added to sales, and then deduct the VAT they’ve paid on business expenses. There is a VAT flat rate scheme with a limited cost trader rate of 16.5% or the standard rate of VAT is 20%. You must register for VAT if your annual turnover is in excess of £85,000 per annum (for the 2021/22 tax year). Remember the £85,000 limit is on a rolling 12-months basis, so if you think you are getting close to this turnover you should think about registering.
If you think you have enough on your plate or you are worried you may miss an important deadline, we have a top tip… get an accountant to help you (specifically DNA). We’ll remind you of important tax dates and payments due, show you ways of keeping your accounts in excellent shape, advise you on allowable expenses and how to report them so you’re as tax efficient as possible. Even better, we’ll be able to do a lot of the work for you! Get in touch with us <<here>>.
