It is important to be aware of UK tax obligations before you register a company. It is beneficial for those who aren’t as familiar with UK tax to contact a Chartered Tax Advisor or Tax Accountants. The first concern is usually Corporation tax, the tax HMRC collect charged on taxable profits from limited companies or certain organisations.
This may include tax on trading and investment profits and capital gains, however dividends are exempt for Companies on the whole. Tax Accountants will be able to advise you about tax on dividends and how this differs.
Examples of those that are liable for corporation tax include:
- UK limited companies (or companies that have a permanent place of business in the UK)
- Certain clubs and societies
- Associations
- Charities, mainly those with trading or investment income
Examples of those who are usually not liable for corporation tax include:
- LLPs
- Sole traders
- Traditional partnerships
- Local authorities
- Health service bodies
Such groups will usually be liable to tax in different ways, outside of the Corporation Tax regime. You can ask your Tax Consultants about this.
Certain activities can be exempt from corporation tax, for example profits made a charity through charitable purposes or selling permanent health insurance.
After your UK company formation, paying corporation tax is usually compulsory on all taxable profits if you are liable. The amount of tax you need to pay is dependent on your profits and needs to be paid every year by the relevant deadlines. You also need to tell HMRC if you are liable for corporation tax and file a Company Tax Return on time. There is now a requirement to file online corporation tax returns.
Being active or dormant as a company can change what you need to do or complete in regards to corporation tax. If the company is active, you need to let HMRC know this, pay the correct amount of Corporation Tax and file a Company Tax Return by the deadlines. If the company is dormant, then you are only required to inform HMRC each year that you are dormant and no return is required (if applicable).
Further details can be found on the HMRC website.
Professional Tax Advisors and Tax Accountants at Wisteria offer a service to complete your Corporation Tax returns and filing requirements so that you don’t have to. This can allow you to focus on other elements of your company and stay compliant in terms of corporation tax.
We also offer a number of other tax services for companies and individuals. For more information, please visit
www.wisteria.co.uk/our-services/tax-for-companies, contact
[email protected] or call 0844 893 0808.
