UK ltd company basic accounting

[gurps5]

Hi all
Just started a ltd company. Few questions
1. For hmrc all i need to disclose is paye, income tax, corporation tax, vat return

Have i missed anything

2. Am i corporation tax exempt for first year

3. Tricks to minimise vat, income tax legally
I.e someone told me about my tax free allowance of £8125 and dividends to extract income from business and reduce the tax i pay.

4. How todo paye.

5. Looking to get a mortgage...can i do this on the business or do i need to extract money to get a mortgage.

I am the only employee and director.

Thanks all i advance for your help

 

[Snorbenz]

Hi all
Just started a ltd company. Few questions
1. For hmrc all i need to disclose is paye, income tax, corporation tax, vat return

You will also need to do a self assessment tax return. Not part of the Ltd requirements but generally a requirement of directors.

Have i missed anything

2. Am i corporation tax exempt for first year

Corporation tax is payable on your net profit. Assuming your company started 1 Sep 2012 and your financial year end is 31 Aug 2013, you will owe tax on any profit you make (before dividends) in that year. The Corporation tax for your 2012/13 year will be payable 9 months after the year end (31 May 2014 in my example) and the corporation tax return will need to be returned to HMRC by 31 Aug 2014.

Tricks to minimise vat

If you're in business, you do not need to register for VAT until your VAT taxable turnover for the previous 12 months is more than £77,000.

income tax legally I.e someone told me about my tax free allowance of £8125 and dividends to extract income from business and reduce the tax i pay.

If you set the limited company up as an employer, you can pay yourself £8,105 (this will incur a small amount of NI) as salary. Any further money can be taken as a dividend if you make enough profit to do so. You cannot take a dividend if you do not make a profit. For 2012/13 you can take £26,265 in dividend above your salary without incurring personal tax. However, you will have to pay corporation tax on the profit you make before deducting your dividend.

4. How to do paye.

You need to register as an employer with HMRC. You can either pay someone to do your payroll for you or you can download Basic PAYE tools from the HMRC website and learn to do it yourself.

5. Looking to get a mortgage...can i do this on the business or do i need to extract money to get a mortgage.

No bank is likely to give you a mortgage on the company until you can produce at least three years of accounts and, in any case, any property you purchased that way would belong to the company and not to you. Better to pay yourself a proper salary from the company and buy the property yourself.

I am the only employee and director.

Thanks all i advance for your help

Finally, you don't only have to deal with HMRC. You will also need to submit Annual Returns and Statutory Accounts to Companies House. I would suggest that you need an accountant to do this for you.

 

[Truemanbrown]

3. Tricks to minimise vat, income tax legally
I.e someone told me about my tax free allowance of £8125 and dividends to extract income from business and reduce the tax i pay.

You HAVE to register if your VATable sales are greater than the registration threshold for any 12 month period (currenly £77k).

However, you could voluntarily register and, if your VATable turnover is less than £150k, apply to use the flat rate scheme. You could find that by using the flat scheme you could save a four-figure sum on your VAT liability .

Before taking this route, you need to ask the question whether your customers, in the main, can recover the VAT themselves (i.e. are they VAT registered). If the answer is No, then your customer base will not be very happy to see a 20% increase in your costs.