Reply to: Few basic questions 8 months in

[ruth11]

And just to be clear on this, a new contract is NOT a new employment.

Ok, just to clarify the mileage question for complete dumb-asses like me....

I was under the impression that it was 10000 miles per year @40p, regardless of number of different clients, then I read this thread and got confused. But I think as I've been writing this, I get it.

I'm thinking that by employment, you mean my personal employment with my own Ltd Company and therefore even a new contract with a new client will not reset this limit. The contract is with my co rather than me and I still work for my co. This is a personal allowance and therefore nothing to do with the contracts\clients, right?

Sounds a lot different when put like that, than it did earlier in the thread so I thought I'd spell it out for others like me. Turns out after all that, my original understanding was right, so yay me!

[where did my id go?]

The 10,000 limit is per tax year, but restarts with every new employer.

And just to be clear on this, a new contract is NOT a new employment.

[basshead]

This appears mixed up?

Only one way to clear this sorry mess up...

ACCOUNTANT FIGHT!!!

[51st State]

register for PAYE online. There might still be cashback for this?

Yep it's still available - £100 offset against 2008/09 payment.

[Xenophon]

It is 10 months from y/e or 22 months of incorporation for small companies. 7 months/19 months for PLCs.

It is paying CT to HMRC that is 9 months and 1 day from y/e.



To HMRC, along with the CT600 and tax calculation. In practice it seems to me a bit odd to send HMRC a cheque 9 months after y/e and then not send the accounts in for another 3 months after that, because the payment of the correct amount of CT would seem predicated on having actually done the accounts. The sensible way to do these things seems to me to be to do all before 9 months of y/e in one go in order:
1. Draw up P + L
2. Calculate Corporation Tax based on P+L and taking into account capital allowances and deducting non-allowable expenses. Create PDF version of the calculations, showing pro rate CT payments for each CT year if company's year is not April 1 - March 31. Round all figures to nearest pound in doing calculations
3. Update P+L based on CT liabilities derived in 2 to calculate net post-tax profit.
4. Create Balance sheet showing liabilities (CT payment, VAT due on work done but VAT not yet paid), and accruals (unbilled work)
5. Fill in Companies House accounts PDF using figures from 4 and fill in the notes. Do not submit at this point.
6. Create HMRC Accounts contaning everything from the Companies House accounts (balance sheet, notes,m etc.), plus cover sheet, shareholdings, director's statement re exemption from audit, and P+L, convert to pdf
7. Complete CT600 online at HMRC site. Fill in numbers. Cross-check calculated CT figures against those drawn up in step 2. If they are not the same, go back and correct figures and update balance sheet and calculations and CH accounts. Attach CT calculations (#2 above), and HMRC accounts pdf (#5 above)
8. Submit both CH accounts and CT600 form, having ensured that the calculated CT liability matches your balance sheet entry and matches the tax shown on your P+L

THere are a few potential mistakes to make with this process, so it's sensible to cross-check both CH and HMRC returns and to do them both some time before 9 months after y/e, even if you have longer to do the CH return. Mistakes include rounding problems, forgetting to apply differential CT rates bearing in mind that CT is basically going up every year and unless your accounts are April 1- March 31, you will need to pay at 2 different rates on pro rate portion of your income, as well as general arithmetic errors.

dude69 is awarded +5 Xeno Geek Points.

[dude69]

There are a few inaccuracies in the replies above, so to correct those:

1. Date for filing the accounts with Co House is 9 months 1 day after the year end (or the anniversary date of incorporation in year 1)

It is 10 months from y/e or 22 months of incorporation for small companies. 7 months/19 months for PLCs.

It is paying CT to HMRC that is 9 months and 1 day from y/e.

2. Accounts need to be filed within 12 months of the company year end

To HMRC, along with the CT600 and tax calculation. In practice it seems to me a bit odd to send HMRC a cheque 9 months after y/e and then not send the accounts in for another 3 months after that, because the payment of the correct amount of CT would seem predicated on having actually done the accounts. The sensible way to do these things seems to me to be to do all before 9 months of y/e in one go in order:
1. Draw up P + L
2. Calculate Corporation Tax based on P+L and taking into account capital allowances and deducting non-allowable expenses. Create PDF version of the calculations, showing pro rate CT payments for each CT year if company's year is not April 1 - March 31. Round all figures to nearest pound in doing calculations
3. Update P+L based on CT liabilities derived in 2 to calculate net post-tax profit.
4. Create Balance sheet showing liabilities (CT payment, VAT due on work done but VAT not yet paid), and accruals (unbilled work)
5. Fill in Companies House accounts PDF using figures from 4 and fill in the notes. Do not submit at this point.
6. Create HMRC Accounts contaning everything from the Companies House accounts (balance sheet, notes,m etc.), plus cover sheet, shareholdings, director's statement re exemption from audit, and P+L, convert to pdf
7. Complete CT600 online at HMRC site. Fill in numbers. Cross-check calculated CT figures against those drawn up in step 2. If they are not the same, go back and correct figures and update balance sheet and calculations and CH accounts. Attach CT calculations (#2 above), and HMRC accounts pdf (#5 above)
8. Submit both CH accounts and CT600 form, having ensured that the calculated CT liability matches your balance sheet entry and matches the tax shown on your P+L

THere are a few potential mistakes to make with this process, so it's sensible to cross-check both CH and HMRC returns and to do them both some time before 9 months after y/e, even if you have longer to do the CH return. Mistakes include rounding problems, forgetting to apply differential CT rates bearing in mind that CT is basically going up every year and unless your accounts are April 1- March 31, you will need to pay at 2 different rates on pro rate portion of your income, as well as general arithmetic errors.

[THEPUMA]

There are a few inaccuracies in the replies above, so to correct those:

1. Date for filing the accounts with Co House is 9 months 1 day after the year end (or the anniversary date of incorporation in year 1)

2. Accounts need to be filed within 12 months of the company year end

3. Make sure that if your accounting year is longer than exactly one year you complete one CT600 for each full year or part therefore, and adhere to the 12 month timeline as above (this always catches people out in year 1)

4. The 10,000 mile limit is per tax year, not per location

Date for filing the accounts with Co Ho is 10 monthsafter year end or the anniversary of incorporation.

The 10,000 limit is per tax year, but restarts with every new employer.

[Nixon Williams]

There are a few inaccuracies in the replies above, so to correct those:

1. Date for filing the accounts with Co House is 9 months 1 day after the year end (or the anniversary date of incorporation in year 1)

2. Accounts need to be filed within 12 months of the company year end

3. Make sure that if your accounting year is longer than exactly one year you complete one CT600 for each full year or part therefore, and adhere to the 12 month timeline as above (this always catches people out in year 1)

4. The 10,000 mile limit is per tax year, not per location

This appears mixed up?

1. The filing date at Companies House is usually 10 months after the period end, although the first year may be slightly different.

2. Payment of Corporation tax is 9 months & 1 day after the period end, although as Simon has pointed out if the period exceeds one year then two returns are required and so technically there would be two tax payment dates.

3. The Company Tax Return (CT600) is due 12 months after the period end.

4. The mileage limit is 10,000 per annum, although the "clock" resets at a new employment.

I hope this clears things up.

Alan

[simondolan]

Few things

There are a few inaccuracies in the replies above, so to correct those:

1. Date for filing the accounts with Co House is 9 months 1 day after the year end (or the anniversary date of incorporation in year 1)

2. Accounts need to be filed within 12 months of the company year end

3. Make sure that if your accounting year is longer than exactly one year you complete one CT600 for each full year or part therefore, and adhere to the 12 month timeline as above (this always catches people out in year 1)

4. The 10,000 mile limit is per tax year, not per location

[Fred Bloggs]

Dividends are for your company year. Not the tax year.

Correct, but, they appear on your own self assessment form April to April irrespective of your trading year end. HTH.

[dude69]

Hello,

Employer Annual Return

Just got a letter through about Employer annual Return (by 19 May 2008) workshops being held by HMRC - I understand that I need to send a P35 and P14. I use payroll software to produce my payslips, do I, therefore, have to make sure my pay is in there until April 2008, then simply print and send a P35 and P14?

register for PAYE online. There might still be cashback for this?

Accounting Period End Date

My accounting period end date is 17/06/08 - what do I have to produce and send to HMRC by this date?

Nothing. You need to do a companies house return within 28 days after this date. This is a five minute job, do it online, showing the shareholders and company details.

Annual unaudited accounts are done 7 months after this y/e (17/6). There is a standard PDF for this on the CH website, basically it's balance sheet + notes to accounts.

The CT return (CT600) is done to HMRC within 9 months of y/e. This consists of:

* CT600 form
* full unaudited accounts including balance sheet and P+L with notes
* CT calculation workings based on net profit + ineligible expenses for CT - capital allowances
* payment for amount due

Again, do CT600 online.

Withdrawl of dividend

I haven't withdrawn any dividend from my business account so far, however, I assume the yearly calcs for tax for this are april - april? (i.e. the financial year?). If so, I'd like to pay myself a dividend - how do I go about this?

April 6th - April 5th is tax year.

Dividends can be paid out of retained earnings from previous years or post-tax profits from this. So no dividends if you have't made enough profits.

Basically, you write out minutes of the meeting declaring the dividend.

Example:
http://www.hemscott.com/news/rna/ite...59440199918942

Then you write out another document showing the actual dividend payment and the notional tax credit

<removed>

Then you transfer the money from the companys account to yours.

If you want £20k, the dividend payment would look like this:

Net Dividend Payment £20,000
Gross Dividend £22,222.22
Tax Credit: £2,222.22

Best practice is to declare a dividend at start of tax year so the money is in your personal account at the earliest date.

It's perfectly possible to pay the money out of company now and regularise the documentation later. But don't forget, if your personal income (based on GROSS dividend + salary + investment income) goes over the basic rate limit), additional tax is payable on dividends at a rate of 32.5% nominal, 25% effective - on £5k received £1.25k income tax would be payable.

Mileage

As I understand it, it's the first 10,000 miles = 40p per mile and anything after that is 25p per mile. However, what period does this run for? i.e. when does it revert to 40p again? If you change contract, does it revert back to 40p for the first 10,000 miles again?

Only for a temporary workplace. As a contractor, anything can be deemed to be temporary. But after 2 years in the same location, it is legally no longer 'temporary'. The 2 years starts from the end date of your contract. I.e. if you work 3 * 6 months contract in the same place and then sign another contract for 9 months there, that would take you over 2 years, so you would no longer be able to claim after 18 months in that case, because you know that you will be there over 2 years, and hence it is no longer 'temporary'.

The definition of workplace is fairly broad: if you work in the same city/area at different locations, it would generally be deemed to be the same workplace.

[Fred Bloggs]

10k resets every april, or every new location

Are you sure?

[Archangel]

Hello,

Employer Annual Return

Just got a letter through about Employer annual Return (by 19 May 2008) workshops being held by HMRC - I understand that I need to send a P35 and P14. I use payroll software to produce my payslips, do I, therefore, have to make sure my pay is in there until April 2008, then simply print and send a P35 and P14?

Accounting Period End Date

My accounting period end date is 17/06/08 - what do I have to produce and send to HMRC by this date?

Withdrawl of dividend

I haven't withdrawn any dividend from my business account so far, however, I assume the yearly calcs for tax for this are april - april? (i.e. the financial year?). If so, I'd like to pay myself a dividend - how do I go about this?

Mileage

As I understand it, it's the first 10,000 miles = 40p per mile and anything after that is 25p per mile. However, what period does this run for? i.e. when does it revert to 40p again? If you change contract, does it revert back to 40p for the first 10,000 miles again?

Many thanks.

I do the P35 and P14 online at the HMRC website (you have to register "do it online" for employers) its easy peasy

To declare a dividend you have to have a board meeting, decide the dividend, deduct the 10% tax credit from the gross amount and pay the net amount equally to shareholders (depending on shareholding). You have to keep the minutes of the meeting and issue a tax cert to the shareholders.

10k resets every april, or every new (removed location removed) employment (you, not yourco). Beware that you can't claim for more than 2 years (search the forum for 2 year rule)

HTH

[SueEllen]

Useful sources of information before you ask questions
1. Ask your accoutant - You do have one don't you?
2. Use the search button at the top of the page
3. Read the first timers guide on this board or other web sources. (Hint - some accoutants have good ones.)

Some of the things you have mentioned particularly mileage have been answered before on these boards in the last day or so, so you are asking to receive rude replies or have your post ignored.

[Sockpuppet]

What software are you using. Most will do online submission for you.


Dividends are for your company year. Not the tax year.

First 10,000 miles is per tax year / employment. Ie you are employed by your company. Nothing to do with contracts.