As you are most likely aware, starting up a new company in the United Kingdom will require you to inform HMRC if it will be liable to Corporation Tax, to pay any tax that may be due and to file all returns well within a specified time frame. It should be noted that these obligations are different than the steps that a limited company needs to take with Companies House. So, let us take a quick look on how this registration takes place as well as address some of the features that are prominently encountered during the registration process.
First Things First: New Companies and Corporation Tax
When any company is first established, there are a few preliminary steps that must be taken. Within ninety (90) days, the HMRC must be informed that the business is active. Any Corporation Tax that is due must be electronically paid on time. For each accounting period thereafter, an online Corporate Tax return needs to be filed.
How to Register at Companies House
Before any limited company will be recognised, it first must be registered through Companies House. There are certain documents that will need to be presented, and these documents are different than those which are required for Corporation Tax through HMRC. Companies House will then inform the HMRC that your organisation has become active (otherwise known as incorporated).
The information that is received by HMRC will then be used to begin a record for your company. It will also be given a reference number that is known as a Unique Taxpayer Reference (UTR). After this, a form known as a CT41G will be send to your company’s registered address. This form can be seen as a “how to” document that will describe the tax implications and other information that is important for an active limited company.
Informing HMRC that your Company is Active
Within three months, HMRC needs to be contacted either by the Companies House web incorporation service or the HMRC online registration platform. Should you have more than one company, a separate username and password will be required for each. In addition, you will also be able to register for PAYE and VAT simultaneously as well as supply more company information (if necessary), as accountants registered with HMRC we can look after much for you..
HMRC will thereafter update their information and contact you in regards to Corporation Tax dates and how to submit payments online. If you have chosen to use the online HMRC registration service, your are automatically enrolled for Corporation Tax obligations. You will also receive a personal PIN within seven working days. Once again, if you have used Companies House to register, you will be required to enroll for Corporation Tax separately through the HMRC.
Has Your Dormant Company Become Active?
There are times when a dormant company may suddenly become active. Once again, HMRC needs to be notified within ninety days (three months) of this occurring. This can be accomplished through the online registration service provided by HMRC.
Other Tax Registration
Depending on the status of your company, taxes such as VAT and PAYE may need to be paid. Should the company have any employees, PAYE and National Insurance contributions are mandatory for each pay period. The company may also be required to pay VAT should its revenue exceed a certain threshold. Company directors or sole traders will need to complete a Self Assessment form and return it to HMRC (this relates to your own income and expenditures for tax purposes).
Tax Obligations for Societies and Clubs
There are instances when clubs and organisations with what are known as “small tax liabilities” will not be required to file a Corporation Tax statement. The best way to determine if this is the case it to enquire at your local Corporation Tax office.
Accountants and Records Keeping
It is always an option to utilise the services of a trained accountant to help with the incorporation process. An agent will represent the company directly and will obviously be much more familiar with all filing processes. Should you choose to perform these tasks yourself, it is essential that you keep all records and financial statements close at-hand so that your Corporate Tax obligations will be clear.