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The Early Bird Catches the Worm — The Benefits of Acting on Taxes Sooner

The Early Bird Catches the Worm — The Benefits of Acting on Taxes Sooner

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The Early Bird Catches the Worm — The Benefits of Acting on Taxes Sooner

by Ali at Taxfile.

For many self-employed UK taxpayers, the January Self-Assessment deadline looms like a tax-shaped storm cloud. But what if you could banish that pre-deadline panic and transform tax season into a breeze?

Psychology tells us that we are motivated when one set of thought processes outweighs the opposing ones, tipping the balance to make us act. With that in mind, here are 7 key things that may motivate you to act on your taxes sooner rather than later.

1. Knowledge is Power

Filing early gives you a clear picture of your tax bill. This allows you to budget effectively and avoid any nasty surprises come January. Knowing if you owe tax or are due a refund empowers you to make informed financial decisions.

2. Less Stress = Happier

If you owe tax, filing early lets you explore HMRC’s Budget Payment Plan. This lets you spread the cost of your tax bill over monthly or weekly instalments, making it much easier to manage.

3. Faster Refunds = Even Happier

If you’ve overpaid tax, filing early means a quicker turnaround on your refund. That extra cash can be a welcome boost for your finances.

4. Time is Money

January is a notoriously busy time for HMRC and accountants. Filing early ensures you avoid spending hours over the phone to HMRC, or your accountant having to contact HMRC on your behalf and spending over 45 minutes on hold.

5. Spot Errors, Fix them with Ease

Sometimes mistakes happen. Filing early gives you time to review your return and identify any errors. This allows you or your accountant to rectify them before the deadline, avoiding potential penalties.

6. Proof of Income, When You Need It Most

A completed Self-Assessment tax return can be used as proof of income when applying for a mortgage, loan, or certain benefits. Filing early ensures you have this documentation known as an SA302 readily available.

7. More Time for Tax Efficiency (if Needed)

If your tax bill is higher than expected, filing early gives you more time to explore tax-saving opportunities with an accountant (if necessary). In our experience, it also allows us to keep an eye on your turnover and spot early if you might need to be VAT registered, or are steadily moving towards it. It could also allow us to advise whether you’d benefit from setting up a limited company.

File Early — and catch the worm!

By taking charge of your Self-Assessment early, you gain control of your finances and avoid unnecessary stress. So, ditch the last-minute panic and embrace the benefits of early filing.

Contact Taxfile & Take Control

At Taxfile we would like to instil healthy habits in our clients and encourage you to come and see us in the early months after April. By doing so, we can file your tax return early and remove all the stress and worry.

Get ready by making an appointment to see our tax agents today. Call, message, or use our online booking system:

020 8761 8000 Book Appointment Contact Us

Taxfile are tax advisors & accountants in Tulse Hill, Dulwich, South London & the South West of England.

Filing with Companies House – A Guide for Limited Companies

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Filing with Companies House - A Guide for Limited Companies

Companies House is the Government agency responsible for maintaining the public register of companies in the UK. Filing with Companies House typically refers to the submission of various documents and records, as required by the registrar of companies in the United Kingdom. In today’s guide, we’ll take a look at what types of document need to be filed, when to file them, and what happens if they’re not filed on time.

What Sort of Documents are Filed at Companies House?

Some of the most common types of filings with Companies House include the following:

Annual Accounts

Most companies are required to file annual accounts, which include a balance sheet, profit and loss account, and notes to the accounts. The filing deadline for this varies and depends on when the company was set up.

A company gets nine months from its year-end in which to file the company accounts to Companies House and such a period helps in some ways. However, it also leaves the company’s accountants with little time to prepare and the directors with very little time to pay their Corporation Tax bill. Ideally, therefore, records should be with the accountant in the month following the company’s year-end rather than in the month the deadline falls — which is so often the case.

Confirmation Statement

The Confirmation Statement replaced the Annual Return in 2016. It confirms that information about the company held by Companies House is accurate and up to date. The Confirmation Statement must be filed at least once a year, even if there have been no changes to the structure of the company (e.g. changes to directors, shareholders, share capital etc.).

It is very important to update the Confirmation Statement when it is due. That’s because, if it becomes too overdue, Companies House is quick these days with a potentially severe punishment: a proposal to strike off the company.

Changes to Company Details

Any changes to the company’s details, such as changes to the registered office address, directorships, company name, or share structure, need to be filed with Companies House.

Special Resolutions and Share Allotments

Similarly, any significant changes to the company’s structure or decisions made by shareholders (such as issuing new shares or changing the company’s constitution) need to be filed with Companies House.

Incorporation Documents

When registering a new company, various documents such as the Memorandum and Articles of Association need to be filed with Companies House.

Once the company has been set up, the director of the company will receive an Authentication Code. This needs to be kept safe as it works like a PIN code and is used for filings with Companies House online.

Company Dissolution

Conversely, if a company is being dissolved (closed down), the necessary paperwork also needs to be filed with Companies House.

Filing requirements and deadlines can vary depending on the type and size of the company. Failure to file required documents accurately and on time can result in penalties and other adverse consequences for the company and its officers. It’s important, therefore, for company directors and secretaries to stay on top of their filing obligations with Companies House. By doing so, they should avoid the negative consequences associated with non-compliance with the law.

Pension Contribution Deadline Extended

Deadline for Voluntary Insurance Contributions Extended to 5th April 2025

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Deadline for Voluntary Insurance Contributions Extended to 5th April 2025

The original deadline for buying National Insurance ‘credit’ was 31st July 2023, but you can now ‘buy’ incomplete years to boost your state pension until 5th April 2025. The extension was approved by the Government, giving HMRC more time to deal with the process.

You can view our original blog on what you need to do to plug the gaps in your National Insurance contributions here.

How do I pay myself as a Director?

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This is a question we often face from new company directors, how to pay yourself from the company.

As part of our £375+VAT package for a new limited company we offer the following;

  • company formation (including the option to have the company phrased as a special purpose vehicle for a property rental company)
  • we will register a single director with HMRC for self-assessment
  • we set up the payroll scheme
  • we arrange your chart of accounts on online software and set up the bank feed so transactions are automatically recorded

So the two ways to get paid are in the form of a monthly salary run from a payroll set up by the limited company and the second way is through dividend allocations based on the company’s annual post-tax profit.

A salary is treated as an expense to the business, therefore decreasing profits, reducing corporation tax, and in turn, minimising the amount of dividends available to then be attributed to each shareholder.

We suggest (correct as of the 23/24 tax year) a salary of £9,096 per annum (£758 p/m) as this is the minimum amount to qualify for a state pension (also known as the secondary threshold).  If there are 2 or more directors (on the secondary threshold or above) or any additional staff on the payroll above the secondary threshold for the company, the Employment Allowance offered by the government becomes available, giving the company £5,000 ‘pot’ towards the employer’s NI contributions.

If the company posts a profit, the value of the post-tax profit can be allocated as dividends to the shareholder(s) of the company.  If there is more than one shareholder, then the dividends are allocated dependent on the percentage of shares held by each shareholder.

Unfortunately, the tax efficiency of dividends is being reduced.  For the 22/23 tax year there is a £2,000 tax-free allowance, for 2023/24 there will only be a £1,000 tax-free allowance and for 2024/25 it has been stated that it will be halved again to £500.

The amount of tax you pay on dividends will be dependent on your income tax band which includes your tax-free allowance, and any earnings from the limited company and any other earnings outside.

This will need to be declared on a self-assessment tax return to HMRC, which covers the period of the UK tax year from 6th April to 5th April every year.

As part of our £375+VAT package we can enrol one shareholder/director onto the self-assessment scheme with HMRC to obtain a Unique Tax Reference (UTR) to allow them to comply with their personal tax obligations in the future.  Contact us on 020 8761 8000 for more information.

How Corporation Tax is calculated has changed

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At Taxfile we can compile and file your company’s tax return as well as calculating what is owed in Corporation Tax.

As of 01/04/2023, the main rate of Corporation Tax (CT) will rise from 19% to 25%, although the rate will remain at 19% for small businesses with profits less than £50,000.00.  However, if the profit is anywhere between £50,000.00 to £250,000.00 then the calculation is slightly more complicated as there is a marginal relief that can be applied.  Anything above £250,000.00 is taxed at the new rate of 25%.

The marginal relief means that you would not pay an outright 25% on a profit between £50k-£250k.  So for example, your company posts a profit of £80,000.00.

At 25% the tax would be £20k.

To calculate the marginal relief you would subtract your profit from the maximum where the relief is allowed (£250k) leaving you £170k and apply the marginal rate multiplier (3/200 or 0.015) to this, which is £2,550.00 in relief.

So the £20k would be reduced by £2,550, meaning that the CT liability would be £17,450 on the £80k profit.

When we file your tax return we calculate:

  • profit or loss for Corporation Tax (this is different from the profit or loss shown in your annual accounts)
  • Corporation Tax liability

Taxable profits for Corporation Tax include the money your company or association makes from:

  • doing business (‘trading profits’)
  • investments
  • selling assets for more than they cost (‘chargeable gains’)

Our SMB Private Limited Company accountancy services will take a lot of the strain away from being a company director, and allow you to focus on why you formed a limited company in the first place, to make a successful and expanding business.

We can help you with all the necessary bookkeeping, computations and filings, as well as advising on other business taxes that may be required such as VAT, and also look after your payroll and expense claims when filing your P11D’s.

Our personable and knowledgeable accountants are real people that you can talk to and meet in person, available to answer your questions and offer advice.

We are a friendly, relaxed accountancy firm offering services to businesses spanning the South London area, from Croydon through to Wandsworth.  We are your local accountant for small to medium businesses.  Call us for advice on 020 8761 8000 for a free 20-min no obligation chat.  We will be happy to answer any of your questions regarding limited companies.

What does it mean to be a Director?

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Your obligations as a Director can be ‘taxing’.

Running a successful limited company typically involves administrative duties outlined by Companies House & HMRC. As the director you’ll also be responsible for ensuring the finances of the company are regulated and healthy.  At Taxfile we can help you focus on growing your business and take care of all your accounting needs.

In order to fulfil your obligations, after your limited company’s financial year comes to a close, it must prepare a set of final accounts and a company corporation tax return.

The company’s final accounts are prepared from the company’s financial records for the period that covers your company’s financial year and must include:

  • a balance sheet showing the value of everything the company owns, owes and is owed on the last day of the financial year
  • a profit and loss account showing the company’s sales against its running costs and highlighting the profit or loss it has made over the financial year
  • notes about the accounts
  • a director’s report (unless you’re a ‘micro-entity’)

The accounts must either meet ‘International Financial Reporting Standards’ or ‘New UK Generally Accepted Accounting Practice’.

At Taxfile we can provide support for small to medium businesses that require accountants to compile and file their full company accounts ready for the shareholders, people of significance to the company, Companies House and HMRC as part of your company corporation tax return.

We can assist you with the bookkeeping and bank reconciliation to ensure that your accounting records are complete and include:

  • all money received and spent by the company
  • details of assets owned by the company
  • debts the company owes or is owed
  • stock the company owns at the end of the financial year
  • all goods bought and sold

As the director you are solely responsible that your accounts and tax return meet the deadlines for filing with Companies House and HMRC. From the accounts you can also deduce how much Corporation Tax to pay. The dates you will need to remember:

  • File the first set of accounts with Companies House 12 months after the date you registered with Companies House
  • File annual accounts with Companies House 9 months after your company’s financial year ends
  • Pay Corporation Tax or tell HMRC that your limited company does not owe any 9 months and 1 day after your ‘accounting period’ for Corporation Tax ends
  • File a Company Tax Return 12 months after your accounting period for Corporation Tax ends
  • File a Confirmation Statement 12 months after: company incorporated, company accounts submitted, or last confirmation statement

As a Director do I need to file a Self-Assessment Income Tax Return?

See our blog HERE

If you are thinking about setting up a limited company we are offering a special price of £375+VAT for the following;

  • company formation (including the option to have the company phrased as a special purpose vehicle for a property rental company)
  • we will register a single director with HMRC for self-assessment
  • we set up the payroll scheme
  • we arrange your chart of accounts on online software and set up the bank feed so transactions are automatically recorded

For more information about any of our tax- and accountancy-related services, call us on 020 8761 8000.

Forming a Limited Company?

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Having been the accountants of choice for individuals and businesses in the South London area, we have recently noticed a surge of individuals moving away from the sole trader status and enquiring about forming a limited company.

The reasons for changing status have varied; someone mentioned they should be, their customers needing them to be, being worried about having a personal liability against the business, to hoping to be more tax efficient.

What do we mean by a limited company?

A limited company is an organisation that is set up to run your business. A business becomes ‘limited’ once the company name and its owner(s) have been registered with Companies House and when limited status is granted, it becomes a distinct entity from its owners.

A limited company structure creates a distinct border between the business owner and the business itself, and under the eye of law, the business becomes a separate legal entity in its own right, becoming responsible for its own actions and finances.  This in turn limits the liability of the owner from any risk the business may need to take.    So if you are a small business expanding & possibly needing employees & assets, then a limited company is a good idea.

At Taxfile we are helping a lot more clients make this transition from a sole trader to limited status.

We can help you set up a private limited company, guide your through the process of what happens and what you need to do.  We offer an all-encompassing service from the setting up to filing the corporation tax returns.

We are offering a special price of £375+VAT for the following;

  • company formation (including the option to have the company phrased as a special purpose vehicle for a property rental company- SPV)
  • we will register a single director with HMRC for self-assessment
  • we set up the payroll scheme
  • we arrange your chart of accounts on online software and set up the bank feed so transactions are automatically recorded

A limited company will:

  • need to keep company records
  • report any changes to Companies House & HMRC
  • need to file an annual company tax return along with the company’s accounts, giving an undistorted view of its finances.

As a director of a private limited company you will:

  • make decisions that benefit the company rather than yourself
  • abide by the rules and regulations outlined by the company articles of association, which are written rules about running the company agreed by the shareholders or guarantors, directors and the company secretary
  • notify any shareholders if you might benefit personally from a company transaction
  • always act with the intention of making the company successful.
  • In forming a limited company you are limiting your personal liability but in doing so you cannot abuse your power with the limited liability to take selfish and unnecessary risks.

At Taxfile we can advise you on setting up a private limited company and take care of all these tasks for your private limited company — and avoid any complications down the line.

Starting a limited company is a relatively straightforward administrative task that starts out with choosing an available company name from Companies House to filling and filing a series of forms. At Taxfile we can ensure that all your forms are compiled correctly, providing ongoing support.

To set up your private limited company you will need at least one director and one shareholder.  As the business owner(s) you would then take a salary/wage from the business.  We can advise you how to best set up your salary and dividends to pay less tax.

Once you have a limited company set up you will need to open a new bank account in the name of your new company.  Our advice to clients, is to try and keep all the business income and expenses restricted within this one bank account and to avoid any personal transactions overlapping into this account.

It is also important to remember to transfer all business-related expenses into the company’s name and move any payment plans over to the new bank account.

If you would like help and advice about forming a private limited company please call us on 020 8761 8000.

Boost State Pension by Plugging Gaps in National Insurance

Boost State Pension by Plugging Gaps in National Insurance

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IMPORTANT: the video mentions the original deadline in April 2023. This has now been extended to 5th April 2025.

Do you have gaps in your National Insurance record? If so, it could mean that you could get a lower State Pension when you reach state retirement age, particularly if you are aged between approximately 45 and 70 at the moment. Generally speaking, you need 10 years of contributions for a basic state pension and around 30 to 35 years for a full state pension. It does vary by circumstance though and, even with gaps, some people might have enough qualifying years for the full state pension already.

Urgently Check Whether You Have National Insurance Gaps

Our advice is to urgently check whether you do have any gaps in your National Insurance record. If so, in many cases it would be wise to make some one-off payments to plug any gaps for the years 2006 to 2016. However, there is limited time to do so despite the deadline for this opportunity having been extended from early April to the end of July 2023 [UPDATE: This has now been extended again to 5th April 2025]. Thereafter, the chance to fix all 11 years from 2006 to 2016 will be gone forever. Read more

New Taxfile Brochure - Download Here

New Taxfile Brochure – Download Here

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New Taxfile Brochure - Download Here.

The new Taxfile brochure is out and you can download it here. Even if you’re an existing client, it’s worth taking a look in case we can help you in ways you weren’t aware of. We can help anyone e.g. the self-employed, directors of limited companies, partners in partnerships, sole traders, retired people, landlords, taxi and cab drivers, construction workers and just about anyone.

The new brochure covers:

  • Self-assessment income tax returns;
  • Services for SMBs;The new brochure from Taxfile - accountants and tax advisers in Tulse Hill, Dulwich, South London & the South West.
  • Accounts work for limited companies;
  • Bookkeeping and bank reconciliation;
  • Payroll & PAYE tax and National Insurance, company pensions and more;
  • VAT help, including for VAT schemes, registration and VAT returns;
  • Company pensions (auto-enrolment etc.);
  • Corporation Tax returns;
  • Confirmation Statements;
  • Making Tax Digital (MTD);
  • CIS calculations and tax rebates for construction workers;
  • Help with tax complications;
  • Taxfile brochure - inside spread.Dealing with HMRC on your behalf;
  • Joining or leaving various tax schemes;
  • Capital Gains Tax (CGT) calculations and handling;
  • Tax calculations relating to property income for landlords;
  • Disclosures of income not previously taxed (e.g. from abroad);
  • And much more.

Forward to a Friend – Free Consultation

Please feel free to forward the new Taxfile brochure to a friend who could benefit from our accountancy and tax-related services. We offer a free 20-minute consultation for new clients, without obligation.

020 8761 8000 Book Appointment Download Brochure

We are open 6 days a week during February including Saturday mornings (by appointment) and later opening (until 6pm) on Mondays and Tuesdays.

Have You Received an Annual Return/Confirmation Statement Reminder?

Have You Received an Annual Return/Confirmation Statement Reminder?

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Have You Received an Annual Return/Confirmation Statement Reminder?

Please do not ignore the yearly e-reminder/letter, from Companies House, to submit the Annual Return/Confirmation Statement for your Company.

Hi — I’m Eveline and I am the administrator/coordinator of the Limited Companies business team and this is one problem that we come across too often at Taxfile.

Confirmation Statement form CS01As a Director, you just need to confirm once a year that there were no changes to the company and, if there were any, you can update them via the annual Confirmation Statement. Taxfile will help and send you a reminder — and we can submit the statement for you if you wish. Either way, please do make sure you submit the confirmation statement to Companies House online and in time.

If ignored, Companies House will start Strike Off action some time after the statement becomes overdue. If you ignore their further communication, they will dissolve your company after two months of publishing in the First Gazette. This would result in your bank sending you notice that the business bank account has been frozen and your assets will stay with the Government.

Taxfile is able to restore your company and help retrieve the money, but this is quite a long and costly process that could so easily have been avoided. So, please don’t forget to submit the Annual Return/Confirmation Statement in due time each year, or arrange for Taxfile to do so for you. Call 020 8761 8000 or contact us here and we’ll be happy to help with anything to do with tax, accountancy, bookkeeping, VAT or anything else to do with limited companies.

This post was brought to you by Eveline at Taxfile.