Posted 24/07/2018 In Advice, Blog 2018-07-242018-09-05https://www.wrightvigar.co.uk/wp-content/uploads/2017/01/wright-vigar-logo.pngWright Vigarhttps://www.wrightvigar.co.uk/wp-content/uploads/2017/01/wright-vigar-logo.png200px200px 0 0 If you’re a business who is currently operating as a sole trader or partnership, you may have heard that becoming a limited company can offer several financial benefits. Before you jump in feet first, here is what you should know before setting up a limited company: Differences between a sole trader or partnership and a limited company A limited company is a separate legal entity to you. As such, it is responsible for its own actions. The money that is held within the business belongs to the limited company and not the owner(s). This reduces your personal risk as any liability is associated with the business and not yourself. However, it also means that you can’t access the money within the company when you want. An accountant will advise you that the most tax efficient way to withdraw money from a limited company is through a combination of salary and dividends. The process for creating a limited company Setting up a limited company is a fairly quick and simple process. It involves registering the company with Companies House. If you prefer, a firm of accountants, such as ourselves, can handle this process for you. Over the years we’ve helped numerous businesses in and around Lincoln, Gainsborough, Newark, Retford, Sleaford and London to incorporate. Registering your company involves submitting a memorandum of association, articles of association and form IN01 to Companies House. The memorandum of association provides details of the limited company’s name, its registered office and describes the nature of the business. The registered office is the official address of the company and it is where Companies House will send any documentation. We can act as your registered office if you prefer. The articles of association lay out the rules and regulations for running a limited company. Responsibilities of a limited company director Upon registering a limited company, you must appoint at least one director who is responsible for the proper running of the company. You will also be asked to nominate someone as a shareholder. In the majority of cases, both of these positions will be held by yourself. Becoming a director of a limited company carries several responsibilities. These are outlined below and we can help in all of these areas: Annual accounts This is a set of accounts that must be submitted on an annual basis to Companies House. Annual accounts are prepared and submitted to Companies House within 9 months of the year end. Corporation tax return form (CT 600) This needs to be submitted to HMRC with a set of year end accounts. It is easier to submit this at the same time as sending documentation to Companies House. Annual Compliance Statement The annual compliance statement must be submitted to Companies House on an annual basis. It provides the government with up to date information on your limited company. VAT returns and paying liability If you choose to register for VAT, you must submit a VAT return and pay any liability on a regular basis, often quarterly. This can be done online with HMRC or through an appointed third party. Included in our range of services, we can advise if you should register for VAT, handle the registration process for you and manage your quarterly returns. Submitting Real Time Information (RTI) Information must be sent to HMRC about an employee’s salary and PAYE and NIC deductions before, or at the same time, the payment is made using Full Payment Submission. Paying PAYE and NIC Payment should be made by bank transfer. HMRC should receive payment of PAYE and NIC by the 19th of the following month. Online self-assessment and payment of tax liabilities Self-assessment tax returns need to be submitted and any tax liability paid in full by midnight on 31st January, following the tax year-end. There are fines and penalties for late submission and payment. Plus, interest will be applied to any outstanding amount. Appointing an accountant Working through a limited company offers several tax benefits, but with this comes added responsibilities. It’s important that you find the right accountant who you can work with to help to relieve some of this added pressure and to ensure you don’t miss a deadline. Why not save yourself the time and hassle and appoint Wright Vigar to handle the whole process for you. Get in touch with us and we can tailor a package to meet your business needs. Recent PostsWhy use a specialist accountant for sole trader services in creative industries?How much should I be paying? A guide for accounting fees for small businessWelcome to Antony!