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6 points checklist – when you start a new company
You may have been working as a self-employed or working under an employment contract with another company before but now you have decided to start your own company and are curious to know what you have to do next.
- Register a new Company
First of all, you must register your new company. All companies are registered at Companies House (companieshouse.gov.uk).
Companies House incorporates and dissolves limited companies, registers the information companies are legally required to supply, and makes that information available to the public.
You’ll need to decide a name for the company that’s not already registered by someone else.
- Open a business Bank account
Once you have a new company. You’ll open a new bank account for that company so that all the company monies are paid and received in that bank account.
- Register for PAYE
You will register the company as an employer with HMRC and get employer’s reference. This will allow you to pay salary to yourself or other employees. Even if you decide to pay yourself a small salary at the start, it needs to be done under PAYE system and any tax or national insurance will become payable to HMRC.
You must register before the first payday. It can take up to 2 weeks. You can’t register more than 2 months before you start paying people.
You or your accountant will be submitting monthly RTI returns to HMRC and you will make any monthly tax/NI deductions to HMRC.
- Register for VAT
If you are expecting the annual sales to go over £83k p.a. and you provide standard services you will need to register the company with HMRC for VAT. (https://www.gov.uk/vat-registration-thresholds)
Usually VAT returns are submitted to HMRC on a quarterly basis. At the same time, you will have to make payments to HMRC depending on your vat liabilities.
Make sure you are charging VAT on your sales invoices and keeping records of input vat to claim. This will be essential in providing info on your VAT returns.
- Annual Accounts and corporation tax
Your company will need to produce annual accounts in a certain format.
You will send Abbreviated Accounts to the Companies House, which will be available on public records.
You will send Full Accounts and Corporation tax return (CT600) to HMRC and make payment for the corporation tax.
- Personal Tax
You will also be required to calculate your personal tax liability and submit a personal tax return (self-assessment SA100) to HMRC.
In addition to your salary, you may have earned dividend income and incomes from other sources which would affect your personal tax liability.
Make sure you are registered with HMRC to be able to do the returns. HMRC will issue you UTR (Unique Taxpayers reference) number which is needed to submit a return.
Note: HMRC and Companies House can penalise for anything omitted or done incorrectly, hence most businesses use an Accountant to help with the above.
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