What are my legal requirements?
As a director of a limited company, you have certain legal requirements and responsibilities.
When you form a company you will receive a letter informing you of your duties, but if in doubt it’s always worth doing some additional research on companies house to make sure you know what you can and can’t do.
However, from an accounting perspective, there are some legal requirements.
- Submit a set of accounts
- Submit a confirmation statement. (This replaces the annual return. It shows the shareholders and the persons in control of the company)
- Submit a corporation tax return
In terms of deadlines, the corporation tax return needs to be submitted 12 months after your year-end. However any tax due needs to be paid 9 months after your year end (yes we know it’s odd, this is HMRC remember)
Annual accounts need to be submitted 9 months after your year-end.
Fines are often imposed for late filing or failing to file what’s required. The legislation even goes so far as to say you can be imprisoned for not filing.
Now, we’ve not seen or heard of anyone going to prison for not filing accounts…but maybe someone has somewhere!
So better make sure you adhere to the deadlines…
Record keeping and accounting records
Another requirement is to keep good accounting records and receipts.
You need to keep these for 7 years as HMRC can ask to inspect your records at any time, so it’s important to keep them correctly.
(This is not only from the tax perspective but also supports your annual accounts. So all the documentation and records supporting your accounts also need to be kept for that 7 year period)
Start out the right way
Often clients come to us after they’ve been trading for a year or so, and perhaps they haven’t given the accounting side of things much thought.
They might be in a bit of a mess with records and haven’t really been paying attention to ‘boring accounting’!
Plus, we get it… paying for an accountant is the last thing they want to be spending cash on when starting out…But in our experience 100% of the time you WILL absolutely get your monies worth starting out the right foot with an accountant from day 1.
Our fees at RJF are geared towards startups and early-stage businesses.
Our message is simple: Get it right as early as possible, and not only will you feel great knowing it’s all being dealt with, but you’ll be on the right side of the law and ready when the time comes to file accounts and returns.
Know exactly what’s going on
An often overlooked side of having all your records in place and kept up to date is that you know what your business is doing at any point in time.
We use tools like XERO which allow you to very simply and effectively keep your records up to date.
You can see what your profit has been at any point in time, what you’ve spent your money on and the current financial position of your business. No more guessing!
An additional nice bonus of having all your accounts in perfect order is if you are looking to get investment, a loan or even sell, everything is right there, fully transparent and ready to go with little notice. Everything a prospective investor needs to make a sound decision.
If you’re looking for an experienced entrepreneurial accountant focused on startups and early-stage businesses then give RJF a call today. Let’s have a chat and see how we can support you and your business.