LIMITED COMPANY ACCOUNTS Smart TAX solutions for your business...

Codex Absolute can help your company take full advantage of all offsets and allowances that the business is entitled to claim on their corporation tax return.

corporation tax
corporation tax calculation

What is a limited company?

A limited company is a company which is a separate legal entity to its owners. This means that its owners (known as shareholders) are only liable for the company’s debts up to the amount of share capital they have invested.

Shareholders (owners) take a salary rather than all the profits like the owner of a sole trader or partnership would. Profits are paid out by way of dividends rather than drawings like those of a sole trader or partnership. Companies pay corporation tax on any profits.

Statutory accounts with Companies House

A limited company must file annual accounts with Companies House which are then made available to the public. These accounts are prepared from your financial records at the end of the financial year. Statutory accounts must include:

  • A statement of financial position – everything the business owns and is owed less everything the business owes.
  • A statement of profit or loss – this shows the sales, running costs and the profit or loss the company has made in the financial year.
  • A statement of change in equity.
  • Cash flow statement.
  • Notes about the accounts.
  • Directors report (unless you are a micro-entity)
companies house corporation tax

These accounts must meet the International Financial Reporting Standards or New UK Generally Accepted Accounting Practice.

corporation tax

Corporation Tax

Corporation tax is something you pay to HMRC on the profits of a limited company. You must register for corporation tax when you start a business. You then need to keep accounting records and prepare a Company Tax Return to calculate how much Corporation Tax to pay.

You must then pay (or report to HMRC if you have nothing to pay) your corporation tax by the deadline (normally 9 months and 1 day after the end of your accounting period). You must then file your Company Tax Return with HMRC usually within 12 months of the end of your accounting period.

What profits do you pay corporation tax on?

  • Trading profits
  • Investments
  • Asset sale profits (selling for more than you paid for)

If the company is based in the UK you pay corporation tax on all profits from UK and abroad, however, if your company isn’t based in the UK and only has an office in the UK you only pay corporation tax on profits from UK activities.

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