If you are a limited company contractor, you will need to hire a specialist accountant to handle your affairs.
Here are some of the typical duties you can expect your accountant to carry out for you over the year. You should always check what is included in your monthly fee before hiring an accountant.
Year End Accounts
As with all limited companies in the UK, you are required to submit your annual accounts to Companies House within 9 months of your financial year-end.
You must also pay any Corporation Tax you owe within 9 months and a day, and also submit your full accounts to HMRC within 12 months.
If you are registered for VAT (and most limited company contractors are), your accountant will complete your quarterly VAT returns and submit them to HMRC.
They should also be able to advise you if you’re better off switching to the Flat Rate VAT Scheme.
Your accountant will deal with all your PAYE and National Insurance paperwork. They should supply you with a monthly payslip which sets out your net salary following deductions for PAYE and NICs.
All payroll data is now communicated directly to HMRC via ‘real-time reporting’, which ensures that information is submitted every time the payroll is run, rather than at year-end (so the old P35 Employers’ Annual Return form is no longer used).
Other forms your accountant should process include:
- P11D – This is the expenses and benefits return. This form details the cash value of all benefits or expenses you as the employer may have provided each “relevant” employee during the last tax year (and all directors).
- P60 – This is an end of tax year certificate which you should keep. It details the total pay for each employee, together with total PAYE tax and national insurance deductions made.
After each company financial year, your accountant will calculate your corporation tax liability. The current CT rate paid by small companies is 19% (2018/19 tax year).
Your accountant can prepare dividend paperwork for you – specifically a template for board meeting minutes during which the dividend declaration was made, together with dividend vouchers for each shareholder.
You can also read our guide to dividend taxation.
Most accountants will also prepare your self-assessment returns each year (quite possibly for an additional fee). The January 31st deadline applies for both submission of your tax return and cleared payment for any tax you may owe. All company directors must complete a SATR.
Your accountant will deal with any correspondence between your company and Companies House and HMRC.
If your accountant is an IT contractor specialist, you should expect them to advise on relevant tax legislation, such as the notorious IR35 legislation. Some accountants also provide a ‘contract review’ service to ensure that you are not caught by the IR35 rules.
Your accountant will also be able to incorporate a company for you and set up a business bank account.