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Registering with HMRC

Once you have formed a limited company, your business becomes its own legal entity. If you haven't registered your company yet, you can register it using our company formation service. It will be subject to various guidelines you may not be familiar with, and you will be forced to take on a new set of financial responsibilities.

Most of these responsibilities must be carried out through HM Revenues & Customs (HMRC).

HMRC is the non-ministerial government department responsible for collecting tax and ensuring the UK’s public services remain funded. HMRC was established by Act of Parliament in 2005 to replace the Inland Revenue and Customs and Excise. Today, HMRC facilitates domestic and international trade and is responsible for general tax oversight.

Why do I need to register with HMRC?

As a new limited company, your business will be required to fulfil a number of tax obligations. The most substantial responsibility you will need to take on is corporation tax.

Most UK companies are legally required to pay a corporation tax proportionate to the profits they are generating. If your company buys goods or services to make a profit, receives income, manages investments or employs staff, you will be subject to pay corporation tax through HMRC.

Presently, there are two rates of corporation tax that apply to UK businesses. These are:

Small profits rate

This rate applies to your company if it earns less than £300,000 per year in profit. You will be taxed at a rate of 20%.

Main rate

Larger companies must pay slightly more. If your company earns more than £300,000 per year in profit, you must pay a 21% corporation tax rate.

You will also be required to enrol in HMRC’s PAYE payroll system. It ensures that income tax and National Insurance Contributions are taken directly out of employee wages at the time if payment. Youi can learn more about PAYE and payroll in our Accounts & Finance guide.

To fulfil these obligations, you will be required to register with HMRC immediately after incorporation.

How do I register with HMRC?

Shortly after your limited company is registered with Companies House, HMRC will be automatically informed. You do not have to contact HMRC to let them know your company is now trading. You should receive items of mail from HMRC at the registered office address you gave to Companies House at the point of incorporation. These items of mail include your company’s Unique Taxpayer Reference (UTR).

Your UTR is extremely important. You will need to quote it each time you contact HMRC or submit information or payments. Put this in a safe place immediately. You should additionally receive information to let you know how to register your business online for tax purposes.

What information do I need to provide HMRC?

When registering online with HMRC, you will be asked to submit certain information about your company. If you choose to register online, your company will also be automatically registered for corporation tax.

When registering with HMRC, you will be expected to include the following information:

  • Company name
  • Company registration number (CRN)
  • Date your company started trading
  • Principal business address (your registered office address)
  • Principal business activities your company carries out
  • Accounting reference date (ARD)
  • Company directors’ details
  • Notification of appointing an agent (if applicable)
  • Notification you have taken over an existing business (if applicable)

After you submit this information, HMRC should then send another letter to your registered office address to inform you of your company’s corporation tax deadlines. That letter should also confirm your deadline for submitting Corporate Tax Returns.

When do I have to pay Corporation Tax?

Corporation tax will always be due before your company tax return. It should usually be paid electronically within nine months and one day of the end of each accounting period. This date will also be the end of your company’s financial year, and HMRC will inform you of your company’s exact deadline.

Your limited company is responsible for working out how much it owes in corporation tax. If you are a director, you are legally responsible for making sure your company pays the correct amount of tax. Because of this, most companies hire an accountant to help them assess their annual tax obligations.

To pay corporation tax, you must follow these steps:

  • Check your deadlines for paying and filing your Company Tax Return.
  • Work out your company’s taxable profits by preparing annual accounts.
  • Check Corporation Tax rates and reliefs. Take total reliefs you can claim away from taxable profits, then multiply the result by your rate to work out how much Corporation Tax to pay.
  • Pay Corporation Tax.
  • Report Corporation Tax by filing your Company Tax Return.

For further advice, contact HMRC or consult an accountant.

When do I have to send my Tax Return?

Your company must file a tax return with HMRC within one year of the end of its incorporation. After that, you must file once every 12 months. You can file your annual return up to 28 days after the due date has passed.

To compete your annual return, you must include:

  • Details of the directors and company secretary (if applicable)
  • What your company does (including its SIC codes)
  • The type of company it is (private or public)
  • Registered company address
  • A SAIL address where records are kept if not at the registered address

You may also need to include:

  • A statement of capital
  • Details of shareholders (if applicable)

You can file your annual return online. It costs £13, which can be paid by credit card or PayPal. You can also send your annual return by post. To do this, you must download and fill in an annual return form and post it to Companies House. This method costs £40, and you must include a cheque with your company number written on the back.

Keeping in touch with HMRC

There are a number of other reasons you will have to liaise with HMRC throughout your company’s lifecycle. Many of these purposes will relate directly to your employees and their taxable income, while others will relate to your annual company accounts. You will also be required to notify HMRC if you have been payrolling benefits.

To contact HMRC, you can fill in an online form here.

For more information on basic accounting and the financial information you will be required to disclose to HMRC, consult our Accounts & Finance guide.