How to do Small Business Taxes
Updated: Apr 14, 2022
You have several tax related obligations when it comes to owning a limited company in the UK. These are:
File your Confirmation Statement annually
File your full accounts with Companies House annually
File your full accounts & CT600 with HMRC annually
RTI filings for PAYE (FPS, EPS) - this must be done every time you pay your employees (FPS), and once a month for each monthly period (EPS)
File your VAT Returns quarterly
You can do all of this yourself, though I strongly recommend employing the services of a reputable accountant if you don’t have experience in doing so.
If you’re using a cloud based bookkeeping software it should handle all of the RTI filings and VAT returns for you with the simple click of a button once set up.
Your annual Confirmation Statement filing should be done via the Companies House website via your Companies House account. Sign in, enter your company number and authentication code, and you will have access to administer the company. It is here that you file your Confirmation Statement, your Companies House annual returns, and complete functions like change of address, change of name etc.
Your HMRC submissions are best done through the HMRC website, and again you’ll need your personal login, your company number, and your authentication code.
Whatever you do, make sure this is done right - even if you’re paying an accountant to do it for you. It doesn’t matter what qualifications or guarantees a third party gives you, if they screw up then you are still liable for the mistake. As a company director you has fiduciary responsibilities in relation to the company, and that means that you (and only you) are responsible for making sure the company is administered within the rules and expectations set out by the Companies Act 2006 and HMRC.
In addition to the above, if you have paid yourself any dividends as a shareholder of a private limited company (and you should if your profits allow as you get an extra £2,000 tax free dividend allowance as at the time of writing) you will need to register for self-assessment and submit your dividend earnings as part of your personal tax return, and any other benefits in kind received from the business (such as a Director’s Loan or company car) should be detailed on form P11D.
As they say, everything is simple when you know how!
It’s definitely worth hiring a professional to deal with all of this for you and to help make sure you’re keeping everything above board and properly done. That said, I advise all of my clients to make sure they know enough about all of this stuff so they are able to effectively manage the people they have doing it for them (but not to a level of detail that you would expect of an accountant), and spot mistakes before they become problems - the last thing any business owner needs is a cowboy pulling the wool over your eyes and sending the business down because of poor business management practices.
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