This content originally appeared on DEV Community and was authored by File Confirmation Statement
Running a limited company in the UK brings many advantages, such as limited liability, greater credibility, and potential tax efficiency. However, it also comes with important tax responsibilities that directors must manage carefully to remain compliant with HMRC and Companies House.
1. Corporation Tax
Every limited company must pay Corporation Tax on its taxable profits. This includes profits from trading, investments, and chargeable gains. Unlike sole traders, companies do not get a personal allowance; Corporation Tax is charged on the full amount of profits.
Registration: A company must register with HMRC for Corporation Tax within three months of starting business activity.
Payment Deadline: Corporation Tax must usually be paid within 9 months and 1 day after the end of the accounting period.
Filing: The Company Tax Return (CT600) must be submitted to HMRC, including accounts and calculations.
2. VAT (Value Added Tax)
If a company’s taxable turnover exceeds the VAT threshold (currently £90,000), it must register for VAT. Once registered, the company must charge VAT on sales, file VAT returns (usually quarterly), and pay any VAT due to HMRC.
3. PAYE and National Insurance
If the company employs staff or pays directors through payroll, it must operate PAYE (Pay As You Earn). This involves deducting Income Tax and National Insurance contributions from wages and reporting to HMRC each month. Employers may also be responsible for paying employer’s National Insurance.
4. Business Rates and Other Taxes
Limited companies operating from commercial premises may need to pay business rates. In some industries, additional sector-specific taxes or levies may apply.
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5. Filing Responsibilities with Companies House
Alongside tax duties with HMRC, companies must also meet filing obligations with Companies House:
- Confirmation Statement – filed at least once a year.
- Annual Accounts – must be submitted in line with the company’s accounting reference date.
6. Record-Keeping Requirements
Companies must keep accurate financial records, including income, expenses, assets, and liabilities. Records should be kept for at least six years in case of HMRC inspections.
Final Thoughts
The tax responsibilities of a limited company are broader than those of a sole trader. Directors must ensure timely registration, filing, and payment of Corporation Tax, VAT, and PAYE, while also keeping up with Companies House obligations. Staying organised and maintaining good records not only prevents penalties but also helps the business run smoothly and efficiently.
This content originally appeared on DEV Community and was authored by File Confirmation Statement
File Confirmation Statement | Sciencx (2025-08-19T14:34:49+00:00) What Are the Tax Responsibilities for Limited Companies?. Retrieved from https://www.scien.cx/2025/08/19/what-are-the-tax-responsibilities-for-limited-companies/
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