From sole trader to a limited company | Bevan & Buckland Chartered Accountants | Swansea

From sole trader to a limited company

19th April 2018

 

Robert Perrin - Tax Manager

robert.perrin@bevanbuckland.co.uk

01792 484559

 

Corporation tax

You must register with HMRC within three months of starting business, a fine for late registration may be charged. 

Business includes buying, selling, advertising, renting a property and employing someone.

The corporation tax rate for a UK resident company is currently 19% and is set to fall to 17% by 2020.

Registration

When you register with HMRC, you will need:

  • Your company’s registration number (this will be sent to the company’s registered address).
  • The date you started trading.
  • The date your annual accounts are made out to.

You will then receive a deadline for paying corporation tax and you’ll need to file a tax return regardless of making a profit or loss.

Reliefs

Small businesses can take advantage of the research and development scheme which offers relief on 230% of qualifying costs.

In certain circumstances, loss-making companies can surrender their losses in return for a payable tax credit worth up to 14.5%.

The patent box enables incorporated companies to reduce their corporation tax rate from 19% to 10% on any qualifying patents or similar intellectual property.

It’s also possible to claim capital allowances on items such as machinery, equipment or vehicles which are used by your company.

There are various allowances and reliefs to potentially help reduce your corporation tax bill, we can help you find which ones may be applicable to your company.

Reporting and payments

It is essential for the company to maintain accurate records.

For this reason and the looming prospect of Making Tax Digital, it’s worth considering the use of cloud accounting software.

Not only will it help you remain compliant, to minimise your tax bill.

Make sure you keep all receipts etc plus up-to-date records of any company assets, liabilities and stock if your company is selling goods.

These records must be retained for six years.

For taxable profits up to £1.5 million, corporation tax is payable nine months and one day after the end of your accounting period. Above this threshold corporation tax is paid by instalments.

Corporation tax can only be paid by:

  • Online or telephone banking; 
  • CHAPS; 
  • Bacs; 
  • Direct debit; 
  • At your bank/building society; 
  • Or by debit or corporate credit card online. 

You cannot pay by post. Interest will be charged on late payment.

For more information. Please contact on Robert Perrin on 01792 484559 or via robert.perrin@bevanbuckland.co.uk