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A brief guide to preparing accounts for a limited company

If you run a limited company, you are required to prepare several different sets of accounts. Here is an overview of the different types:

Your annual tax return

Every year, all limited companies, even those that have not made a profit and owe no tax, have to prepare a tax return and return it to HM Revenue and Customs (HMRC). Even some dormant companies still have to prepare and return an annual tax return.

The date that this is due depends on when you registered your business. Your first return has to be completed and with HMRC 12 months after your company was formed.

Dealing with corporation tax

You also need to work out whether you owe any corporation tax. If you believe that your firm does not owe this levy, you need to notify HMRC of that fact. Should you have made enough money to owe corporation tax, the deadline for payment is nine months and a day after your enterprise’s financial year finishes.

Accounts for Companies House

The information contained in your HMRC return can be used to prepare the accounts that you are required to send every year to Companies House. These have to be filed nine months after the financial year for your business ends.

At first, you will have two separate dates for filing your annual tax return and Companies House accounts. After two years, these can be aligned, allowing you to file one set of statutory accounts.

Accounts for your members

All limited companies also have to prepare annual account documents for their stakeholders.

Tax returns for dormant firms

If your business is dormant, that is to say you have not provided any products or services for the full tax year, you may still have to provide all parties with their accounts. You can check whether this is the case or not by contacting HMRC. It is possible to avoid having to file accounts for a dormant company, but you need to meet the required criteria and arrange this with HMRC in advance, following the proper application process.

Preparing and filing the accounts for a limited company is quite complex, as a result most business owners decide to use an accountant for these tasks. This allows the director or management team to put the focus on building the business, while knowing that their accounts are being done properly, and that the taxman and their shareholders are being kept happy.

Posted by Mark
July 2, 2015

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