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What is Taxation?
Taxation is the most important source of income for modern governments. Tax is a payment that is necessarily paid to the government according to the laws made by it. Every financial year, the company must:
- Put together statutory accounts.
- Send companies to house a confirmation statement(which was known as the annual return).
- Send HMRC a company tax return.
Tax responsibility of the director of a limited company must fill in a self-assessment tax return every year and pay tax and National Insurance through the PAYE system if the company’ pays the salary. Taxation majorly includes :
Company Tax: Corporate tax is a tax on the taxable profit of limited companies and some organizations including clubs, societies, cooperatives, charities, and other unincorporated bodies.
Self Assessment Tax: Income tax is a tax on individual income. Not all income is taxable, you’re only taxed on taxable income above a certain level. Even then there other reliefs and allowances that can reduce Income Tax Bill.
Every company has to file a copy financial statement every with companies house. In the copy of the financial statement every year with companies house. In the copy of a financial statement, different sizes of companies are required to show less information in the accounts in comparison to the larger ones. Small and medium-sized companies are allowed to file accounts with certain information omitted i.e. filing Abbreviated Accounts.
Deadline Dates which a company has to meet
|Requirements by statute for companies||Authority to whom file/pay||Deadline Date|
|Need to file Abbreviated/Abridge Accounts||Company House||On or before 9 months after the year-end date|
|Need to pay corporation tax||HMRC||On or before 9 months and 1 day after the year-end date|
|Need to file company tax return i.e. CT600 [along with full accounts]||HMRC||On or before 12 months after the year-end date|
|If the company is preparing the first set of accounts after incorporation||Company House||21 months after the date you registered with companies house (not exact 9 months from year end date)|
There are statutory penalties for the late or incorrect filing of company accounts at the company
|Length of delay||Penalty|
|Up to 1 month||£ 150|
|1 month to 3 months||£375|
|3 months to 6 months||£750|
|More than 6 month||£1,500|
There are statutory penalties for the late or incorrect filing of company tax return (CT600) at HMRC:
|Length of delay||Penalty|
|1 day||£ 100|
|3 months||Another £100|
|6 months||HMRC will estimate your CT liability and add a penalty of 10% to the unpaid tax|
|12 months||Another 10% of any unpaid tax|
The deadline date for filing the tax return for Sole Trader and Partnership Firms:
There is no requirement to file a tax return of sole trader business as it will consider as a part of the individual tax return so need to file an SA return. However, in the case of a partnership firm, need to file a tax return of a partnership firm as well as partners. To file a tax return of partnership firms, UTR No. needs to obtain from the HMRC.
There is a penalty if the company misses the deadline for submitting an SA tax return or paying your tax liability. You will get a penalty of £100 if the company’s tax return is up to 3 months late. The company will have to pay more it is later up to 3 months. It will be based on an estimation of tax that needs to be paid to HMRC.
Payments are collected by a central government agency called Her Majesty’s Revenue and Customs (HMRC) and local councils.
Benefits of outsourcing Taxation
The tax system in the United Kingdom is back-breaking, companies are looking for solutions that free up time and resources as well as exceed their current standards of quality. A superlative solution to this dilemma is by outsourcing taxation services.
- Quick 24-48 hour turnaround for each tax return
- Lower labor costs
- Enabling accountants to expand their service offerings.
- In-house, front-end teams by saves time and energy and can focus on building relationships
- Enhance Date Security
- Avoid penalties
For scaling companies, bookkeeping is a low-margin and time-consuming activity. Outsourcing bookkeeping allows companies to offer it as an additional service which leads to increased revenue and deeper engagement with the clients.
AVI Accounting makes it easy for you; we will discuss your requirements providing the reports as per the format required. AVI Accounting has expertise in handling multiple sector clientele experienced working on multiple accounting software such as
Outsource to AVI Accounting
Outsourcing your accounting and bookkeeping to a dedicated and experienced team can be the best way to stay submissive through times of change. AVI Accounting helps your business to maintain its international momentum by offering the flexibility to scale up and to meet the company’s needs.