UK Company Administration

Notes on creating and administrating my private limited company, MagicMonster Limited.

Company Registration

I created our limited company using ukincorp's E-Quick Package. You sign up by filling out one HUGE web form. It cost me 32, and there are heaps of other extras I could've picked. The company was registered in 2 days, and you can now search for it on Companies House webcheck.

Bank account creation

I'm choosing HSBC's Business Direct account as I only need online transactions and accept payments. I don't think I will need 3 months past statements as my company did not exist in the UK. Besides, I need to have them sent from Australia.

After a few days finally got a call from HSBC asking lots of questions about the new company account that I am trying to open. They are going to send some more paperwork through the mail then its going to be another 2-3 weeks before I get a sort code and account number.

VAT Registration

Its a huge 17.5% here.

After enrolling it is paid in 3 monthly periods. For me it will be due 1 month after every 3 months. The first 3 month block ended April 30.

I have signed up to HMRC employer online services and setup a direct debit for VAT payments. When setting up direct debit make sure you specify the 'current account' of your business. Direct debits will not work against a 'business money manager' account. After filling in a VAT statement online they will direct debit from the company current account at a later date. They tell you the date so you can setup a future transfer to ensure the current account has enough money it, this will maximize any interest you may be earning.

When paying VAT have the following values:

1 VAT due in this period on sales and other outputs

2 VAT due in this period on acquisitions from other EC Member States

3 Total VAT due (the sum of boxes 1 and 2) Value will be calculated

4 VAT reclaimed in this period on purchases and other inputs (including acquisitions from the EC)

5 Net VAT to be paid to Customs or reclaimed by you (Difference between boxes 3 and 4) Value will be calculated

6 Total value of sales and all other outputs excluding any VAT. Include your box 8 figure.

7 Total value of purchases and all other inputs excluding any VAT. Include your box 9 figure.

8 Total value of all supplies of goods and related costs, excluding any VAT, to other EC member states

9 Total value of acquisitions of goods and related costs excluding any VAT, from other EC member states

For me, fill in inputs 1, 4, 6 and 7.

Paying Employees

2014-05-16: HMRC help site for starting and administering your business.

Register as an employer with employees

Step 1 - Register as an Employer. Phone them up and then they will send you things in the post

Step 2 - Fill in P46 for each employee (usually it is P45 but not if you have never worked in UK).

Step 3 - Signed up for Use PAYE Online for Employers Internet, you will need to get a password in the mail

Step 4 - submit the P46 online

Add a new Employee

Install the Employer CD-ROM 2007

Open Employer Database 2007, and add them there.

Paying a Salary

Decide how much money is to be deducted from the company bank account that is attributed to the employee. The employer NI contribution for 2013-2014 is 13.8%, so the gross salary that can be paid to an employee is 1000/1138 * x.

This amount does not include reimbursements.

This amount will include NIC (employer + employee), income tax, and employee's pay

I am using the free Basic PAYE Tools - RTI.

Home -> your employer -> Manage employees -> an employee to be paid -> Employee payments -> Add employee payment.

Enter the gross salary here.

Click on Employee pay and deductions record

Copy the following to Excel employee salary sheet

  • Employer contributions due on all earnings above the ST () to EMP in excel.
  • Employee contributions due on all earnings above the PT () to PT in excel.
  • PAYE Income Tax -> Tax deducted or refunded in the period () to PAYE in excel.
  • Employee net pay is Gross Salary - PT - PAYE

    HMRC must be paid PT + EMP + PAYE

    The total coming out of the business bank account is Gross Salary + EMP

    Next submit RTI (real time information) reporting to HRMC. Click on Home -> Employer -> Outstanding submissions

    Submit the salary data for each employee

    Open the excel and total up "employee net" and "HMRC owed" for the month.

    Transfer the total to the business current account.

    Make a payment to each employee. Remember to change the month in the reference message.

    Make a PAYE payment to HMRC. Remember to increment the month in the reference message.

    Primary NI contributions are employee contributions. Secondary NI contributions are employee contributions.

    Month Numbers

    Number Date From Date To
    1 06 APR 05 MAY
    2 06 MAY 05 JUN
    3 06 JUN 05 JUL
    4 06 JUL 05 AUG
    5 06 AUG 05 SEP
    6 06 SEP 05 OCT
    7 06 OCT 05 NOV
    8 06 NOV 05 DEC
    9 06 DEC 05 JAN
    10 06 JAN 05 FEB
    11 06 FEB 05 MAR
    12 06 MAR 05 APR

    Paying HM Revenue & Customs

    Every pay period I need to pay HMRC. A tax month ends on the 5th, pay must reach them by the 22nd.

    Currently I am paying Accounts Office Shipley

    HMRC Bank account details

    Account Name Sort Code Account No.
    HMRC Cumbernauld 08-32-10 12001039
    HMRC Shipley 08-32-10 12001020

    End of year - Reporting pay and deductions

    P60

    A P60 should be given to each employee. This is the same as a 'group certificate' or a 'payment summary' in Australia. Do this online!

    Go to Employee List, pick an employee -> P60

    In the 2008 edition, click Online Services -> Send your P14s and P35 Online from the P11 Calculator now -> Print P60s

    P14 and P35

    The P14 and P35 is due annually on May 19th each year, for the previous year.

    In the 2008 edition, click Online Services -> Send your P14s and P35 Online from the P11 Calculator now -> Select your Company -> Next

    I needed to check the totals of PAYE + NICs already paid this year.

    I needed to check the amount I had been credited for filing online last year. To find out, go to the Login and look for Employer notices.

    Annual reporting obligations

    Companies House

    Filing company accounts is required every year, and is due at the end of October for my company. I received a letter titled "YOUR COMPANY'S ACCOUNTS ARE DUE SOON" from companies house. This can be completed online at companies house. An email should arrive after successful submission.

    At companies house, a confirmation statement (previously known as an "Annual Return") is also required and is due it a different date. There is a small fee, 14.00 (on the 1st Jan 2012) and I can pay using my American Express card. The form is easy to fill in, it is for confirming the directors of the company.

    Company Tax Return

    Every year I need to send this in to HMRC. Since I pay myself a salary and 0 the company balance I only report turnover.

    HMRC Software for managing payroll

    2011-05-08: Use the HMRC's Basic PAYE Tools at businesslink.gov.uk. This is like an updated version of the CD-Rom. It makes incremental backups in the "Application Data/HMRC/payetools/backups" directory.

    2010-12-04: I used to get a CD in the mail, but you can get the Employer CD-ROM 2010 online. I also registered for the HMRC employer email alert service.

    2012-05-14: year end. I just realised my software was out of date and the auto update wasn't working. Instead I have downloaded and installed version 4.1.2. Now there is an option to complete my P35 and P14s.

    Employee Tax Codes

    Emergency Tax Codes

    Emergency tax codes are a default tax code. We haven't been issued with a HMRC statement telling us what our tax code should be, so we use the emergency tax code.

    Year Code
    2011-12 747L
    2012-13 810L

    When updating the tax code it may ask about a "week 1 / month 1" basis. This means non-cumulative, and the difference will have to be settled at the end of the year. I think it is easier to answer "no" unless required.

    Change of Address

    2012-06-03. I moved home and changed my private limited company address. I filled an electronic AD01 Change of Registered Office Address form on the Companies House website.