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Directors of limited companies: File your accounts on time and avoid fines

by Kobus Van den Bergh | Oct 04, 2017
  • By law, the director of a limited company in the UK is responsible for filing certain accounts and ensuring they are sent to HMRC and Companies House within a set timeframe. Failure to do so could result in some serious penalties and fines, so if you’re a director, you need to ensure you don’t miss these important dates.
  • man-running-from-deadline

    Annual accounts

    Every limited company needs to ensure that the documents representing the company’s statutory accounts are prepared in accordance with the correct accounting principles and practices. These documents must also be submitted on time. Generally, for small limited companies a set of financial statements must include a directors report, an income statement (profit & loss) and a statement of financial position (balance sheet).

    Corporation Tax

    When you set up your limited company, you automatically get different reporting dates for the first annual accounts you send to Companies House. At the same time, you will be told when you should send your Company Tax Return to HMRC.

    In the first year, because your first accounts will usually cover more than 12 months, you will have to send two tax returns. This is because your accounts start on the day your company was set up (incorporated) and end on the accounting reference date that Companies House sets for the end of your company’s financial year. This date is the last day of the month your company was set up.

    For example: If your company was set up on 11 May, your accounting reference date will be 31 May the following year. Therefore, your company’s first accounts will cover 12 months and 3 weeks. HMRC then splits the period into two returns, 12 months first and then a second period up to the accounting reference date.  In the following years, your accounts will normally cover the financial year from 1 June to 31 May.

    Don’t be late!

    Accounts are due at Companies House nine months after the accounting year-end period. The Corporation Tax return and accompanying set of accounts are due at HMRC 12 months after the accounting year-end period, however the Corporation Tax payments are due by nine months after the accounting year-end period.

    Both Companies House and HMRC have separate penalties for filing your accounts late. You need to note of these dates below as penalties can be steep and may double if directors fail to submit their accounts for consecutive years.

    Companies House 

    Time after deadline

    Companies House penalty

    Up to one month

    £150

    One - three months

    £375

    Three - six months

    £750

    Over six months

    £1,500

    HMRC

    Time after deadline

    HMRC penalty

    One day

    £100

    Three months

    Another £100

    Six months

    10% of your unpaid Corporation Tax

    12 months

    Another 10% of your unpaid Corporation Tax

    Confirmation statements

    Each year, on the anniversary of your limited company you are required to submit a confirmation statement to Companies House. This is submitted online and acts as a verification of your companies’ details, including the name, owner and related details.

    Self Assessment returns

    As the director of a limited company in the UK you are also required to complete a personal tax return. Your tax return will detail the amount you have earned throughout the year as well as how much tax and national insurance you have paid to HMRC. The deadline for personal tax returns is 31 January 2018.

    Failure to meet this deadline will result in a £100 fine, even if the form is just one day late. After 1 May 2017, a £10 penalty is applied for each day it remains unfiled for the following three months. This means that you could be faced with a fine of around £,1000 if you miss your deadline by more than three months.

    Stay on the right side of HMRC and Companies House. Let us handle your accounts so you can focus on growing your business. Get in touch with us on +44 (0) 80 8141 1643 or accountinginfo@1stcontact.com for personalised accounting services.

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