Running a Limited Company without an accountant’s help can be hard work To be a successful director of a Limited Company, you need to be king of organisation and have a competent level of accounting know-how to keep track of all the tasks involved in order to work within the Companies Act 2006
If you decide you want to manage your Limited Company on your own without the assistance of an accountant, you need to be aware of what needs to be completed and when. To help you with this, we’ve compiled a top ten list of the most important responsibilities you need to undertake as a director of a Limited Company.
1. Submit your Annual Accounts
As your Annual Reference Date is the end of the month your company was set up, you need to send your annual accounts to Companies House 9 months after the year end. Are these the first accounts you’re filing for your company? Do they cover a period of more than 12 months? Then you must deliver them to Companies House within 21 months of the date of set up.
Tip: You also need to file full detailed accounts with HMRC, but you can file a shorter abbreviated version of accounts with Companies House.This is by far the most important thing you have to do as a company director.
2. Making Legal Dividends
As long as you have enough profit, you can be tax efficient through your Limited Company using dividends. Paying yourself through this method requires you to do so using a mix of a low salary and dividends, minimising the amount of Tax & National Insurance you have to pay.
3. Declaring your Dividend through Records & Minutes
For each dividend payment the company makes, a voucher needs to be created together with the minutes from a director’s meeting (to declare the dividend) along with the date, company name, the names of the shareholders being paid, the amount of the dividend and the amount of the dividend tax credit.
Working with Churchill Knight will benefit you in this respect, as we total a client’s vouchers so it makes it simpler to work out on tax returns.
4. Correctly Pay Yourself
If you’re not experienced in this step, it can be quite daunting to ensure you not only pay the right tax and National Insurance but also paying yourself the maximum amount tax efficiently.
The best format to do this when not working with an accountant is to work out your own management accounts and establish the legal dividends, ensuring your Company Tax Return and Annual Accounts are correct.
5. Filling Annual Returns
Think of an Annual Return as a dossier of your company; the registered office address, the type of Limited Company it is and the type of business you run from it.
Be warned – Companies House has the capacity to close down any companies and even prosecute directors for not sending an annual return within 28 days of the anniversary of when the company started. Companies House make it very easy for you to do this – either online (costing £13) or paper form to their address (costing £40). Whichever one you choose, make sure it’s before the deadline in order to avoid the potential of being disqualified from directing a company in the future.
6. Keeping Company Records up to date
Have you recently got married and changed your surname? Have you moved your registered address? Companies House will need to know about it.
7. Notifying of Changes to your Shares
Companies House must be notified if your shares change in any way. This includes allocation of shares, changes to the company share capital and unique changes made to them.
8. Keeping your Company’s Financial Liabilities up to date
As a director of your Limited Company, it’s your responsibility to promote the success of your company as part of the Companies Act 2006. This includes acting in the best interests of the company and keeping in mind the interests of creditors.
9. Complete a Director’s Personal Tax Return
As the tax year ends on 5 April and you have until 31 January next to complete this form with HMRC, your personal tax return is an essential component of running a Limited Company successfully. As this is a legal requirement, be wary of an initial £100 penalty if it’s not submitted in time. After three months daily penalties will also apply.
10. Keep Adequate Accounting Records
Make your life easier as a Limited Company director by keeping all important accounting documents to hand such as VAT Returns, whether your company is trading or not.
HMRC have made this process easier for you by allowing you to do returns online, however, you’re responsible for calculating the amount of VAT you owe them, as well as working within the deadline that they give you. These records should contain entries showing the amounts received and expenditure incurred by the company, giving details of the assets and liabilities.