UK Companies’ Duties

Last modified – 16/04/2024

Registered office address :

A registered office is a legal requirement for all companies registered with Companies House. It is the official address of the incorporated company and is accessible to the public. The address may be different from your usual business address. Companies House, HMRC and other government bodies will use your registered office address to send statutory letters and legal notices. All companies are legally obliged to display the registered office address on business correspondence such as letters and the company website.

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Confirmation statement :

Companies House requires all company directors to complete their company’s confirmation statements in full and on time. Although there is no fine for late filing, failure to file on time is a criminal offence and directors can be personally fined for non-compliance. Companies House may also seek to remove your company from its register for non-compliance.

Your confirmation declaration must contain the following information:

Head office address
Shareholders
Business sector (as expressed in Standard Industrial
Classification (SIC) codes)
Amount of issued share capital
Shareholder(s)
Officers within your company who are considered to be a
Person exercising significant control (PSC)

All limited liability companies are required to declare their PSC(s). A PSC is a person who owns more than 25% of the shares or voting rights in your company. A PSC can also appoint or remove the majority of directors on the board of directors. Alternatively, a PSC may simply exercise “significant influence or control”, according to HMRC.

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Annual return :

An annual declaration is a document that all registered companies must provide, showing an overview of important (non-financial) information on the internal structure of the company.

All companies registered with Companies House are displayed in the public records and the purpose of the annual report is to confirm the relevant details of the company, i.e. the names, addresses and contact details of directors, secretaries and shareholders.

If you are the director or secretary of a registered company, it is your legal responsibility to ensure that the annual declaration is properly completed and filed.

Your annual declaration will include the following information:

Company name
Registered address (head office)
SAIL address (this stands for “Single Alternative Inspection Location” – if your records are not kept at your registered address, you will need to provide details of the alternative location)
Contact details of company officers
Contact details of company secretary, if any

If your company owns shares, you’ll also need to provide a “declaration of capital”, which gives details of the shares, as well as the contact details of any shareholders.

Your annual return – as the name suggests – must be filed annually with Companies House. Every 12 months is the minimum requirement. However, you can return your information as many times as you like during the year. This is particularly useful for finding out if you need to make any changes to your company information that might affect the deadline. Rather than delaying your return, you can file your most recent information and, after any changes, you can then file a new return that will update Companies House with the most accurate and up-to-date information.

Regarding deadlines, your first return must be received by Companies House within 28 days of the anniversary date of your company’s formation. All subsequent returns must be filed within 28 days of the date on which the last return was completed.

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Corporation tax statement (CT600) :

Businesses must file their tax returns within one year of the end of the accounting period; the return must include a self-assessment of tax liability, eliminating the need for HMRC assessment (although HMRC retains assessment powers in certain cases where it is not satisfied with the return or where the business fails to make a return).

The UK tax system can impose numerous penalties for non-compliance with the self-assessment system. These include penalties for late filing of returns, failure to keep proper records, submission of an incorrect return, commission of errors in certain documents sent to HMRC, unreasonable failure to report errors in assessments by HMRC, and failure to respond to a formal notification of information requested. from the tax authorities within the time allowed.

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VAT registration :

You must register for VAT as soon as your business exceeds £85,000 in sales, or if you expect to exceed this level of income in the current financial year of your business.

Once you are registered for VAT, you must charge 20% on top of all the goods and services you supply to consumers and other businesses. Not all products are subject to 20% VAT: some products and services are subject to a 5% rate, while others attract a zero rate.

When you make a sale, you need to set aside the VAT element in your bank account. For example, if you charge £100 for a good or service and an additional £20 (20%) VAT, this is the “output” VAT you have collected for HMRC.

Every time you buy something from a supplier who charges you VAT, the VAT portion of your supplier’s invoice is your VAT input.) At the end of your VAT period (normally every quarter), you add up all the output VAT you’ve charged, then subtract all the input VAT you’ve paid. You then pay HMRC the difference, or they pay you the difference.

You must pay any VAT due one month and seven days after the end of a VAT period. So, for example, if your VAT quarter ends on January 31, you must submit your VAT return and pay your VAT invoice by March 7.

If you have any questions, please contact your accountant or the accountant we work with.

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VAT declaration :

You generally need to send a VAT return to HMRC every 3 months. This is called your “accounting period.”

If you are registered for VAT, you must submit a VAT return even if you have no VAT to pay or recover.

The deadline for filing your declaration online is generally one month and 7 days after the end of an accounting year. This is also the deadline for paying HMRC. You must allow time for the payment to reach HMRC’s account.

If you miss the deadline for submitting your return, HMRC will send you a ‘VAT Notice’ telling you how much VAT they think you owe.

You may have to pay a surcharge or penalty if you file your return after the due date or if you pay it late.

The amount you owe will be calculated differently depending on the accounting period it corresponds to.

For each VAT return sent late, you will receive one penalty point. This includes void returns (where you have nothing to declare).

Once you reach your penalty point threshold, you will receive a £200 penalty. The threshold is set by your accounting period (whether you pay monthly, quarterly or annually).

You will receive an additional penalty of £200 for each subsequent late submission while you are at the threshold.

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Dormant companies

As per Her Majesty’s Revenue and Customs (HMRC) guidelines, a company is classified as dormant under the following circumstances:

– It has ceased trading and generates no other income, such as from investments.
– It is a newly incorporated limited company that has not commenced trading.
– It is an unincorporated association or club with a Corporation Tax liability of less than £100.
– It is a flat management company.

Trading activities encompass buying, selling, renting property, advertising, employing individuals, or earning interest. In such cases, it’s necessary to notify HMRC of your company’s dormant status.

Despite being dormant, HMRC might still require you to submit your Company Tax Return.

Furthermore, if your company is registered for VAT and you have no intention of trading again, you must deregister for VAT within 30 days of dormancy. However, if you plan to resume trading, you should submit ‘nil’ (empty) VAT returns during the dormant period.

If your company employs individuals and you do not intend to resume trading within the current tax year, it’s advisable to close your PAYE scheme.

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Additionally, concerning Companies House requirements:
– Even if your limited company is dormant for Corporation Tax or according to Companies House, you must still submit your confirmation statement and annual accounts.
– Companies House considers a company dormant if it has had no ‘significant’ transactions in the financial year. Notable transactions exclude filing fees, penalties for late filing, or share capital payments upon incorporation.
– There is no need to notify Companies House when resuming trading. Your next set of accounts, which are not classified as dormant, will indicate the company’s active status.

For further information, click here.