Annual Returns - few queries

[metallica]

Hi,

Looking for some guidance here regarding tax returns for a first time contractor.

I am new to the contracting world and opened my company on 10th May 2015 and started contracting from June 2015. Based on this -

- Can someone tell me what is my companies 12 month accounting period?
- When is the earlier I have to submit my CT600 and what dates will it need to correspond to?
- When you submit CT600, do you get an acknowledgement from HMRC - if yes how long does that take?
- Am I correct to say that I need to make two returns, 1- Self assessment and 2- Company tax return.
For 1 the period always runs from 6th Apr - 5th Apr and for 2 it always runs on the company registration date?

Thanks in advane

[stek]

Hi,

Looking for some guidance here regarding tax returns for a first time contractor.

I am new to the contracting world and opened my company on 10th May 2015 and started contracting from June 2015. Based on this -

- Can someone tell me what is my companies 12 month accounting period?
- When is the earlier I have to submit my CT600 and what dates will it need to correspond to?
- When you submit CT600, do you get an acknowledgement from HMRC - if yes how long does that take?
- Am I correct to say that I need to make two returns, 1- Self assessment and 2- Company tax return.
For 1 the period always runs from 6th Apr - 5th Apr and for 2 it always runs on the company registration date?

Thanks in advane

Get an accountant, urgently.

[northernladuk]

- Can someone tell me what is my companies 12 month accounting period?

Jesus wept. How do people that ask questions like this actually get contracts?

I'd say read the newbies guides to the right but I've a feeling not even this one is in there. Go do some basic research and then get an accountant.

I pity the accountant that gets landed with this one.

[SueEllen]

Get an accountant, urgently.

WHS

Get an accountant URGENTLY

[ASB]

Ok, you don't know where to start. So as mentioned an accountant to be going on with would probably be sensible. With respect if you are unsure as to when your CT600 may be due and what period it covers then I think you might struggle with some of the details of corporation tax and basic accounting.

Anyway, by default your first accounting period will end 1 year after incorporation date. You can elect to change this, it's easy enough to find out how from Co House website. It may make life easier to adjust you accounting period when possible to 31st March. Co tax is payable 9 months after the year end; I can't be bothered to check when the CT600 will be due.

Your SATR has nothing to do with the company whatsoever. Save for the fact that a source of income is likely to be the company of which you are a director.

I would be concerned about the state of your accounts. I am guess you have been simply taking money at random from the company. This is generally a bad idea if you are not aware of exactly the trading state of the company. So getting an account now before you compound any mess you are in would be wise.

If you are determined to do your own accounts there are plenty of accounts tutorials out there. But without keeping up to date it might not be wise. There are a number of small business accounting packages that you can use to produce incomplete records. If you know what you are doing and take the time to set them up properly then its easy enough to keep on top of. If you don't it's a good way of really fouling everything up.

There are other good reasons not to do your own accounts. Mortgages
often want your accounts, and would generally not accept those you have prepared yourself. Same with any access to any sort of finance.

I doubt you are in any worse state than anybody else who has been trading for a few months without doing anything, it will be nothing to faze any reasonable accountant. But if you have drawn too much cash you could have a world of problems. How much is too much? Probably 70% of pre tax billings would be almost certain to give a few headaches.

I'm also wondering about VAT. Have you registered? Do you need to do so? Are you up to date with your returns?

The Vatman can give a complete anal reaming. Excise bit of HMRC is someone you really don't want to hack off. If you should be vat registered but haven't you could be easily looking at losing the amount of VAT you should have charged since you will have to pay it, and may well not be able to bill anybody for it. Then you have to understand the difference between regular VAT and FRS and whether you want to be doing accrual or cash based accounting for it.

[metallica]

Ok people calm down.

I know I am a newbie to contracting and not a veteran like you folks but if you cant help constructively please refrain from replying

The point I was trying to understand is regarding the two returns for the first trading year, i.e making two CT600's. Is that correct?
I am still many months away but want to understand it right.

The second was regarding acknowledgement, sure you all must have done it a million times so far. Do you get one from HMRC (both electronic and paper one) and how soon you get it.

Great, now you can start bashing me again.

[ASB]

I tried to be helpful. And will continue, but first....

People can get agitated. Why? A lot of people have got into significant trouble by blisful ignorance. A sign of this can be a failure to understand some very basic things.

Does this mean you are messing up? Frankly I havent got a clue, but there is an obvious risk you might be. As such advice to consult a professional to appraise your entire situation rather than the tiny tidbit you released is well intentioned.

So to repeat, and expand, in a slightly different way.

There is only one ct600 for a trading year (strictly period). It can span 2 tax years. There is complexity related to apportionment should tax rates change. But if you can count days its easy enough to deal with. Apportion profits pro rata to each year and calculate accordingly.

Incorporate 1st October, ct600 end sept 2016, 17 etc. Thus each of these spans 2 tax years.

cant say what happens these days with electronic filing, but there didnt use to be an acknowledgement. A statement of account would be sent out before the due date.

hmrc helpline are helpful. You could get it straight from the horses mouth.

[northernladuk]

You don't have to be a veteran to use Google

And telling you to get an accountant is the best advice you can get. ASB's dedication to answering people's questions is legendary but I can't help thinking there is such a poor grasp of the basics that any explanation will either just not make sense or spawn a whole host of other questions. Getting a professional on board who will take the time to explain it properly so you fully understand is much better.

He certainly doesn't have time to explain expenses, divis, 24 month rule, IR35, RTI, FR VAT etc etc to you but a decent accountant might.

[Contreras]

To the best of my knowledge... and any decent accountant would tell you this with an initial consultation for free, also considering your particular circumstances.

After incorporation HMRC would have asked for a CT41 form (probably electronic these days) to declare the company's start of trading and they should have replied to this with the important dates - Accounting period, Corporation tax, and company tax return. You'll also get a "Notice to deliver a Company Tax Return" which states the accounting period it is needed for.

Annual Reference Date is at the month end 12 months from incorporation. Company Tax Return filing deadline is 9 months after ARD, tax payment is due 9 months + 1 day. I.e. you have 21 months from incorporation.

After CT600 submission HMRC send a confirmation (CT620), within a week in my experience, which tells how to pay and by when. You can also check this by login to the HMRC gateway.

Company accounts and the Annual return filing are a matter of public record and can be checked on the Companies House website where you can also set up email notification.

The company year can be extended to more than 12 months, however this does not push back the tax return deadline for that 'year', so don't go thinking that it will buy some time. It will require TWO CT600's for HMRC and ONE statement of accounts to Companies House. It does not affect the Annual Return (details of directors) which remains 12 months from incorporation.

ARD and the tax year do not have to align. In fact they never do because ARD is at month end and tax year is 6-Apr to 5-Apr. Some people like to have company year Apr-Mar, others have Jan-Dec. Personally I would say leave as is unless you have a good reason and discuss this with the accountant first.

[yMyjgT]

Jesus wept. How do people that ask questions like this actually get contracts?
.......
I pity the accountant that gets landed with this one.

I don't understand this attitude.

I don't know why people on here expect new contractors to walk into the world of contracting already knowing the basics. It's so easy to be sat in a permanent role one day, and then rapidly find yourself in a contract role. Yes, people *should* be finding out everything they can, legal responsibilities being a director, etc, etc, etc, but contracting isn't some magical aspect of life where human imperfections don't apply.

If people are finding new contractors on here so annoying/frustrating, actually attempting to gain an understanding of things, then perhaps there should be another sub-forum called "Accounting / Legal - Newbies", where those who are less annoyed/frustrated can reply.
People are not incapable of doing their jobs, or going to be hard work for an accountant, just because they've ended up in a contract role without being fully prepared for it.