UK Tax & Accounting Questions Answered

Personal UTR is a 10-digit code completely unique to each UK taxpayer who is an individual. Whether you're a sole trader, earning untaxed income, part of a partnership, or a company director with income beyond PAYE, you need a personal UTR to file Self Assessment tax returns online or by post.

HMRC uses it to identify you for everything relating to your personal taxes. It's different from a company UTR (for limited companies). LOYALS helps London residents obtain and manage their personal UTRs for Self Assessment across Westminster, Camden, Islington, Hackney, Tower Hamlets, and all boroughs.

You must file Self Assessment if you're: (1) self-employed as a sole trader earning over £1,000, (2) a partner in a business partnership, (3) earned over £100,000, (4) have untaxed income over £2,500 (rental, savings, investments, freelance), (5) are a company director, (6) received foreign income, or (7) HMRC sent you a notice to file.

You may also file voluntarily to claim tax reliefs or prove self-employment for Tax-Free Childcare or Maternity Allowance. LOYALS helps London taxpayers determine filing obligations and handles complete Self Assessment preparation from £300 one-off or £50/month with year-round support including deadline reminders and HMRC correspondence handling.

Anyone who is self-employed earning over £1,000, a partner in a business partnership, has rental income from property, earned over £100,000, is a company director, has untaxed income over £2,500, receives foreign income, or wants to claim tax reliefs must file SA100.

Most employees paying tax through PAYE don't need to file unless they have additional untaxed income. LOYALS advises London residents across all 32 boroughs on Self Assessment obligations and handles complete tax return preparation with optimized expense claims and allowances to minimize tax bills legally.

Tax year runs 6 April to 5 April. Paper returns due by midnight 31 October following the tax year end. Online returns due by midnight 31 January following the tax year end. These deadlines never extend for weekends or bank holidays.

Missing deadlines triggers automatic £100 penalty immediately, regardless of whether you owe tax. Further penalties accumulate after 3, 6, and 12 months. LOYALS has never missed a client deadline in 500+ London businesses served. We file early to give you months to plan tax payments.

Payments on Account are advance payments toward next year's tax bill. If your Self Assessment bill exceeds £1,000 and less than 80% was deducted at source, you make two payments: (1) 31 January during tax year (50% of previous year's bill), (2) 31 July following tax year (remaining 50%).

This means 31 January is cash-intensive - you pay previous year's balance PLUS first payment for current year. You can reduce Payments on Account if income drops by claiming online or calling HMRC. LOYALS helps London taxpayers budget for tax payments and minimize Payments on Account when circumstances change.

You must keep sole trader records for at least 22 months after the end of the tax year the return is for. For example, 2024/25 tax year (ending 5 April 2025) records must be kept until at least 31 January 2027. If you file late, keep records for 15 months after you file.

HMRC may check records during investigations to verify expenses and income. Lack of records means disallowed expenses and higher tax bills. LOYALS provides cloud bookkeeping for London sole traders with automatic record retention and HMRC-ready reports anytime you need them.

Simplified expenses let sole traders and partnerships claim flat rates for vehicle costs, working from home, and using home for business, instead of calculating actual costs. Vehicle: 45p per mile (first 10,000 miles), 25p thereafter. Home office: £10-£26/month depending on hours worked.

Once you use simplified expenses, you cannot switch back to actual expenses for the same asset. Only available to businesses with turnover under £150,000. LOYALS analyzes which method saves London sole traders more tax - simplified vs actual expenses - and implements the most tax-efficient approach.

Sole traders and business partnerships that have no companies as partners can claim simplified expenses. Limited companies cannot use simplified expenses - they must claim actual costs. Simplified expenses are optional; you can choose actual expenses instead if they're higher.

Simplified expenses flat rates available for: (1) Business vehicle costs (cars, vans, motorcycles - 45p/mile for first 10,000 miles, 25p thereafter), (2) Working from home (£10-£26/month based on hours), (3) Living in your business premises (adjust private use based on rooms used). All other expenses must be claimed at actual cost.

Register for Self Assessment online at gov.uk if you've never registered before. HMRC will set up your online account and send your UTR within 10 business days (21 days if abroad). You must register by 5 October following the tax year you started trading (e.g., started trading July 2024, register by 5 October 2025).

If you've previously filed Self Assessment, re-register using form CWF1 with your existing UTR. LOYALS handles complete sole trader registration for London residents, ensuring you're set up correctly from day one with proper tax code notifications and HMRC account access.

Yes, you can amend your Self Assessment return online or by post within 12 months from the filing deadline (not from when you actually file). For 2024/25 tax year (deadline 31 January 2026), you can amend until 31 January 2027.

Corrections might increase or decrease your tax bill. If they increase it, you must pay the difference. If they decrease it, HMRC will refund you. LOYALS handles amendments for London taxpayers, ensuring corrections are made properly and any refunds are claimed promptly.

For 2024/25: Personal Allowance £0-£12,570 = 0%, Basic rate £12,571-£50,270 = 20%, Higher rate £50,271-£125,140 = 40%, Additional rate over £125,140 = 45%. Personal Allowance reduces by £1 for every £2 earned over £100,000, disappearing entirely at £125,140.

Scotland has different rates. Dividend and savings income taxed at different rates. LOYALS optimizes London taxpayers' income mix to minimize tax across all income types legally.

Paper returns: Midnight 31 October following tax year end. Online returns: Midnight 31 January following tax year end. For 2024/25 tax year (6 April 2024 to 5 April 2025): paper deadline is 31 October 2025, online deadline is 31 January 2026.

All Self Assessment tax must be paid by midnight 31 January following the tax year end. For 2024/25 tax year, payment deadline is 31 January 2026. This includes: balancing payment for previous year, first payment on account for current year, and second payment on account is due 31 July.

Keep sole trader accounting records for at least 5 years after the 31 January submission deadline of the relevant tax year. For 2024/25 return (filed by 31 January 2026), keep records until at least 31 January 2031.

Self Assessment tells HMRC about all your taxable income and claims all tax allowances and reliefs you're entitled to. It's how you report untaxed income, claim business expenses, and calculate final tax owed. Most employees don't file as PAYE collects all their tax, but self-employed people, landlords, and those with complex finances must file.

Advisory Fuel Rates (AFR) apply when using company car for business - covers only fuel cost as employer already pays for the car. Approved Mileage Allowance (AMA) applies when using personal car for business - covers fuel, insurance, repairs, MOT, depreciation (45p/mile first 10,000 miles, 25p thereafter).

Emergency tax codes (1257L W1, 1257L M1, or 1257L X) are temporary codes used when HMRC doesn't have enough information. W1 = weekly pay, M1 = monthly pay, X = either. These are non-cumulative, meaning tax is calculated only on current period's pay without considering year-to-date earnings, often resulting in overpayment.

Property allowance is a tax exemption of up to £1,000 per year for individuals with rental income. If rental income is under £1,000, no tax is payable and nothing needs declaring to HMRC. Over £1,000, you must file Self Assessment and choose between claiming property allowance OR actual expenses (whichever is more beneficial).

You make Payments on Account if your Self Assessment bill is over £1,000 AND less than 80% of your tax was collected at source through PAYE. Payments on Account don't apply if most tax is deducted through PAYE or you're in your first year of Self Assessment.

Everyone including students gets Personal Allowance of £12,570 (2024/25) - the amount you earn tax-free each year. If you earn over £100,000, personal allowance reduces by £1 for every £2 over £100,000. At £125,140 or more, you have no personal allowance and all income is taxed.

Once you claim simplified expenses for an asset, you cannot switch back to actual expenses for that asset during its lifetime. You must continue using simplified expenses. This is why LOYALS calculates both methods before choosing, ensuring you select the most tax-efficient approach from the start.

Construction Industry Scheme (CIS) is a tax deduction system where contractors deduct money from subcontractor payments and pass it to HMRC. Standard deduction is 20% for registered subcontractors or 30% for non-registered. Gross payment status (0% deduction) is available to qualifying subcontractors.

When contractors pay subcontractors, they verify status with HMRC, deduct the appropriate percentage, and pay the net amount. Deductions count as advance tax payments toward the subcontractor's annual tax bill, not final tax. LOYALS specializes in CIS for London contractors and subcontractors across all 32 boroughs.

CIS was introduced to prevent tax revenue loss from construction payments not being properly accounted for. It ensures subcontractors pay income tax and National Insurance by collecting tax at source through contractors, reducing tax evasion in the construction industry.

Step-by-step: (1) Contractor engages subcontractor, (2) Contractor verifies subcontractor with HMRC before each payment, (3) HMRC confirms deduction rate (0%, 20%, or 30%), (4) Contractor deducts tax and pays net amount to subcontractor, (5) Contractor files monthly CIS return to HMRC, (6) Contractor pays deductions to HMRC by 22nd of following month, (7) Subcontractor receives payment statement showing gross amount and deduction, (8) Subcontractor claims credit on annual Self Assessment or through PAYE.

LOYALS manages the entire CIS process for London contractors and subcontractors - handling verification, monthly returns, payment submissions, and annual reclaims. We've recovered £500K+ in overpaid CIS tax for London construction businesses.

Higher 30% deduction for non-registered subcontractors encourages registration with HMRC so they have verified records. It's a penalty rate designed to push subcontractors to register properly, making it easier for HMRC to track them and ensure tax compliance across the construction sector.

Contractors must file monthly CIS returns showing ALL payments to ALL subcontractors in the previous tax month (6th to 5th of month). Returns due within 14 days after the tax month end. Must be filed even if no payments made that month. File online using HMRC's CIS online service or compatible software.

Yes, exactly. Contractors fulfill statutory duty assigned by HMRC, acting as tax collectors. They verify, deduct, report, and pay deductions to HMRC on behalf of subcontractors. This lowers HMRC's burden and ensures proper tax collection across the construction industry.

Money deducted by contractors is paid to HMRC as advance payment toward the subcontractor's income tax and Class 4 National Insurance liability. It stands as credit in the subcontractor's account. When filing Self Assessment (or through PAYE for limited companies), the subcontractor claims credit for deductions and receives refund if overpaid.

Yes! CIS deductions are advance tax payments, not final tax. When you file Self Assessment (sole traders) or through PAYE (limited companies), you claim credit for all CIS deducted during the tax year. If CIS deductions exceed your actual tax liability after claiming allowable business expenses and allowances, HMRC refunds the difference.

Many subcontractors overpay because contractors deduct from gross payments, but you can claim expenses to reduce taxable profit. LOYALS clients across London receive average £3,200 refunds annually through optimized expense claims and proper CIS credit management.

Limited company subcontractors claim CIS deductions through monthly payroll (PAYE), NOT through Corporation Tax return. Submit FPS as usual, then submit EPS (Employer Payment Summary) showing total CIS deductions for year-to-date. HMRC offsets CIS against your PAYE bill. Any excess is refunded.

If PAYE bill is less than CIS deducted, carry forward to next month. LOYALS manages PAYE and CIS reclaims for London limited company subcontractors, ensuring maximum refunds and zero penalties from £150/month.

Self-employed subcontractors claim CIS deductions on their annual Self Assessment tax return. Record full amounts from invoices as income in the self-employment pages, then enter all CIS deductions in the 'CIS deductions' field. HMRC calculates your final tax bill and offsets CIS deductions. If CIS exceeds tax owed, you receive a refund by 31 January.

LOYALS optimizes expense claims for London self-employed subcontractors, maximizing deductions legally to ensure largest possible CIS refunds across Westminster, Camden, Islington, and all boroughs.

Not necessarily. CIS deductions offset your overall tax liability calculated on profits (income minus expenses). For sole traders: CIS credits against income tax and Class 4 NI. You get refund if CIS exceeds total tax bill. For limited companies: CIS credits against PAYE liability. Refunds are common when you have proper expense records.

The key is maximizing allowable expenses legally. LOYALS ensures London subcontractors claim all qualifying expenses - tools, materials, vehicle costs, insurance, protective equipment, training - to minimize taxable profit and maximize CIS refunds.

Two types: (1) Mainstream contractors - businesses in construction that pay subcontractors (builders, developers, labour agencies, gang masters, property developers). (2) Deemed contractors - not in construction but spend over £1 million average on construction in any 3-year period (housing associations, local authorities, government departments).

Contractors must register if they pay subcontractors for construction work OR spend over £1 million per year on construction even if not in construction business. Subcontractors should register to benefit from 20% deduction rate instead of 30%, and to be eligible for gross payment status (0% deduction) if they qualify.

A subcontractor is a person or company that performs construction work on behalf of a contractor. This includes tradespeople (builders, electricians, plumbers, carpenters, plasterers), labour-only providers, and companies providing construction services to main contractors or clients.

Contractors must pay CIS deductions to HMRC within 14 days of the tax month end (6th to 5th), or 17 days if paying electronically. For example, deductions for tax month ending 5 March must be paid by 22 March. Deductions must be paid even if not yet collected from clients.

CIS deduction rates: (1) 0% for subcontractors with gross payment status, (2) 20% for registered subcontractors, (3) 30% for unregistered subcontractors. Materials are excluded from CIS deductions - only labour and plant hire costs are subject to deduction.

Gross payment status allows qualified subcontractors to receive full payment without any CIS deductions (0% rate). To qualify, you must pass HMRC's compliance and turnover tests, prove you're in the construction business, and have clean tax record. You pay tax through Self Assessment or PAYE at year-end instead of having it deducted monthly.

LOYALS helps London construction businesses apply for gross payment status, ensuring they meet all qualifying conditions and maintain compliance to keep the status. This dramatically improves cash flow for growing businesses.

Yes, you can reclaim VAT on purchases made before VAT registration: up to 4 years for goods you still have or goods used to make other goods you still have, and up to 6 months for services. The supplies must be for business purposes only and for the business now registered for VAT.

VAT Flat Rate Scheme lets you pay VAT as a fixed percentage of your VAT-inclusive turnover based on your business type (ranging from 4% to 14.5%). First year of VAT registration gets 1% discount. Simplifies accounting but you generally cannot reclaim VAT on purchases except capital assets over £2,000.

Not suitable if you buy mostly standard-rated items, regularly receive VAT repayments, or make many zero-rated/exempt sales. LOYALS analyzes whether Flat Rate Scheme saves London businesses money compared to standard VAT accounting.

Standard VAT accounting period is 3 months (quarterly). HMRC assigns your quarters when you register. Some businesses can opt for monthly returns or Annual Accounting Scheme (one return per year). Your VAT return covers all sales and purchases in that accounting period.

VAT returns due 1 month and 7 days after the end of your VAT accounting period. For example, period ending 31 March has deadline of 7 May. Must file online through MTD-compatible software. Paper returns no longer accepted since Making Tax Digital implementation.

VAT payment due same day as return filing: 1 month and 7 days after period end. Payment must clear HMRC's account by deadline. Direct Debit payments automatically collected 3 working days after deadline (giving you extra time). Late payment triggers penalties and interest.

Annual Accounting Scheme: File one VAT return per year, due 2 months after your VAT year end. Make advance payments during the year (9 monthly or 3 quarterly instalments) based on previous year's VAT liability, with final balancing payment when filing annual return.

Monthly payments due at end of months 4, 5, 6, 7, 8, 9, 10, 11, and 12. Quarterly payments due at end of months 4, 7, and 10. Final balancing payment due within 2 months of year end when you submit annual return. HMRC tells you payment amounts and due dates in writing.

Input tax is VAT you pay on business purchases. You can usually reclaim it on your VAT return if the purchases are for business purposes. Claim on the return covering the period when you received the VAT invoice. Can also reclaim VAT on some pre-registration purchases within time limits.

Yes, if VAT-registered you must charge VAT on all taxable sales at the appropriate rate (standard 20%, reduced 5%, or zero-rated 0%). No option to decide not to charge VAT to certain customers. Must show VAT separately on invoices and account for it on VAT returns.

VAT (Value Added Tax) is a consumption tax added to most goods and services in the UK. Businesses with turnover over £90,000 must register and charge VAT on sales (output VAT), but can reclaim VAT paid on purchases (input VAT). The difference goes to HMRC.

Standard rate is 20%, reduced rate is 5%, some items are zero-rated, and some are exempt. LOYALS manages complete VAT compliance for London businesses including MTD registration, quarterly returns, and optimization strategies from £150/month.

Yes! Zero-rated supplies are still taxable supplies, just at 0% VAT rate. You can reclaim input VAT on purchases used to make zero-rated supplies. This differs from exempt supplies where you cannot reclaim input VAT.

Yes, if your taxable turnover (including zero-rated sales) exceeds £90,000 in rolling 12 months, you must register for VAT. Zero-rated supplies are taxable supplies charged at 0%, different from exempt supplies which don't count toward the threshold.

Standard rate: 20% on most goods and services. Reduced rate: 5% on domestic fuel, children's car seats, mobility aids. Zero-rate: 0% on books, newspapers, children's clothes, most food. Exempt: no VAT charged on insurance, education, health services, financial services.

Partly exempt businesses use the Capital Goods Scheme to claim input tax on capital assets. VAT recovery is adjusted over time based on taxable use. As taxable use increases, claim more VAT; as it decreases, repay VAT already claimed. Applies to buildings, computers, aircraft, ships over certain values.

No. VAT reverse charge applies to intra-EU transactions AND (from 1 October 2020) to specified domestic construction services. In reverse charge, the buyer accounts for VAT instead of the seller, preventing fraud and simplifying cross-border transactions.

Making Tax Digital (MTD) for VAT requires businesses with taxable turnover over £85,000 to keep digital records and file VAT returns using MTD-compatible software. Implemented from 1 April 2019. Paper returns and manual spreadsheets no longer accepted for most businesses.

LOYALS provides MTD-compatible software and complete VAT submission services for London businesses, ensuring compliance with digital record-keeping requirements and automated quarterly filings from £150/month.

Zero-rated: VAT charged at 0%, still taxable supplies, can reclaim input VAT, must report on VAT return (books, food, children's clothes). Exempt: No VAT charged, not taxable supplies, cannot reclaim input VAT, don't report on VAT return (insurance, education, health services).

A VAT group allows connected companies to file one combined VAT return under a single VAT registration. Transactions between group members are disregarded for VAT (no VAT charged internally). One member acts as representative, responsible for VAT compliance. Simplifies administration for corporate groups.

A VAT return reports all sales and purchases for the accounting period, showing output VAT charged, input VAT reclaimed, and the net VAT owed to or from HMRC. Filed quarterly (or monthly/annually if opted). Must use MTD-compatible software to submit returns digitally.

Yes, you can correct errors on past VAT returns if: errors are below the reporting threshold (£10,000 or 1% of turnover, whichever is greater), errors are not deliberate, and the return was for a period ending less than 4 years ago. Make corrections by adjusting your next VAT return or submit form VAT652 to HMRC.

VAT Flat Rate percentages vary by business type, ranging from 4% (food retailers, post offices) to 14.5% (accountants, architects, IT consultants). Limited cost businesses (spending less than 2% of turnover or £1,000/year on goods) pay higher rate of 16.5%. First year of VAT registration gets 1% discount on applicable rate.

A VAT number is a unique 9-digit identification number issued to VAT-registered businesses. UK VAT numbers have 'GB' prefix (e.g., GB123456789). You must display your VAT number on invoices, letterheads, websites, and all business correspondence. Different from your UTR or Company Registration Number.

Yes, it's mandatory (not optional) for VAT-registered businesses with taxable turnover over £85,000 since 1 April 2019. Must keep digital records in MTD-compatible software and file returns through digital links to HMRC. Paper returns no longer accepted. Penalties for non-compliance include fines and surcharges.

Almost anyone can be a UK company director. Requirements: Must be over 16 years old, not currently disqualified from being a director, not bankrupt (unless court permission granted), not subject to UK government restrictions. No specific qualifications required, making company formation accessible to most people.

As director, you're legally responsible for running the company, ensuring Companies House and HMRC filings are on time, maintaining statutory records, and meeting all compliance obligations. LOYALS helps London directors across Westminster, Camden, Islington, and all boroughs manage these responsibilities from £150/month.

Directors must: File annual accounts with Companies House (9 months after year-end), file Corporation Tax return with HMRC (12 months after year-end), file Confirmation Statement annually, maintain statutory registers (directors, shareholders, PSC, charges), ensure company has registered office in UK, keep accounting records for 6 years, report changes to Companies House within 14 days.

Failure triggers penalties starting at £150 per late filing, potential director disqualification, and personal liability for company debts in serious cases. LOYALS manages all director compliance obligations for London companies, ensuring zero late filings and protecting directors from personal liability.

A Person with Significant Control (PSC) is an individual meeting one or more conditions: holds over 25% of shares, holds over 25% of voting rights, has right to appoint or remove majority of directors, has right to exercise significant influence or control, or has control over a trust or firm that would meet these conditions.

All companies must identify and register PSCs, maintain a PSC register, and report PSCs to Companies House. Failure is a criminal offence. LOYALS ensures London companies maintain accurate PSC registers and report changes within required 14-day deadline.

A Confirmation Statement is an annual filing to Companies House confirming your company information is correct. It includes: director details, shareholder information, registered office address, share capital, SIC codes (business activities), PSC details, and trading status confirmation.

Due 12 months from incorporation or last Confirmation Statement, must file within 14 days of due date. Filing fee is £13 online or £40 by post. Even if nothing has changed, you must still file. LOYALS handles Confirmation Statements for London companies automatically, ensuring timely submission and zero penalties.

Confirmation Statement must include: (1) Company registered office address, (2) Director details (names, addresses, dates of birth), (3) Secretary details if appointed, (4) Shareholder information, (5) Share capital (issued shares and their values), (6) SIC codes (business activity codes), (7) PSC details, (8) Statement of capital, (9) Trading status of shares.

Yes! Every company including dormant and non-trading companies must file a Confirmation Statement annually. There is no exemption for dormant companies. Filing confirms Companies House has up-to-date information even if nothing has changed. Late filing triggers automatic penalties.

To activate a dormant company, inform HMRC within 3 months of starting trading. Sign in to company's HMRC Gateway account and register for Corporation Tax. You'll receive a Company Tax UTR and can then file active company accounts and Corporation Tax returns. Companies House is notified automatically through your accounts filing.

An umbrella company is a standard UK limited company acting as employer for contractors. Instead of contractors managing their own limited company admin, they become employees of the umbrella company which handles payroll, taxes, and HMRC compliance. The umbrella invoices clients and pays contractors as employees minus fees.

Benefits include reduced admin, but typically less tax-efficient than running your own limited company. Suitable for temporary contracts or contractors who don't want compliance burden. LOYALS advises London contractors whether umbrella or own limited company is more beneficial based on individual circumstances.

A Personal Service Company (PSC) is a limited company set up to provide services of a single contractor. Usually 100% owned by the contractor who is sole director. Provides limited liability protection, more professional image, and tax-efficient income extraction through salary/dividend mix.

Subject to IR35 rules which determine if you should be taxed as employee or genuine business. LOYALS helps London contractors set up and run PSCs compliantly, handling accounts, tax returns, and IR35 status determination from £150/month.

A Managed Service Company (MSC) is a company with separate owners and organisers managing a group of contractors. Unlike PSCs which contractors own and control themselves, MSCs are controlled by management companies. Subject to different HMRC regulations and generally less tax-efficient than PSCs.

Companies must keep accounting records for 6 years from end of the financial year they relate to, or longer if: records show transactions covering multiple accounting periods, company bought assets lasting over 6 years, Company Tax Return filed late, or HMRC started compliance check.

A company qualifies as small if it meets 2 or more of these: Annual turnover not more than £10.2 million, balance sheet total not more than £5.1 million, average of 50 employees or fewer. Small companies can file simplified accounts and may be exempt from audit requirements.

Micro companies meet 2 or more of: Turnover £632,000 or less, balance sheet total £316,000 or less, 10 employees or fewer. Micro companies can file minimal information accounts with most disclosures optional, providing privacy and reduced compliance costs.

Yes, you can apply to extend accounts filing deadline but only in exceptional circumstances like serious illness, fire, flood, or theft of records. Apply online at Companies House before the deadline with supporting evidence. Extensions rarely granted for general reasons like accountant delays.

Yes, change accounting reference date using form AA01 filed at Companies House before current accounts deadline. Can shorten accounting period at any time. Can only extend once every 5 years (except in first year or with court order). First accounting period can be up to 18 months long.

The authentication code is a 6-character alphanumeric code used to access Companies House WebFiling service. It allows you to file documents online, update company information, and manage statutory filings. Issued by Companies House when company incorporates and can be requested again if lost.

To close (strike off) a company, file form DS01 to Companies House signed by majority of directors. Company must not have traded or changed name in past 3 months, have no outstanding debts, and all assets distributed. Companies House publishes notice in Gazette; if no objections within 2 months, company is dissolved. Remaining assets pass to the Crown.

Alternatively, use formal liquidation if company has debts or complex affairs. LOYALS advises London companies on most tax-efficient closure method and handles entire strike-off or liquidation process.

Dormant company: Never started trading since incorporation. Non-trading company: Previously traded but currently inactive. Non-trading companies may still have transactions like paying penalties, bank charges, or receiving interest, which prevent dormant status. Dormant companies have no significant accounting transactions.

A close company is controlled by 5 or fewer participators (shareholders) or any number of participators who are directors. Most UK family-owned businesses are close companies. Special tax rules apply including restrictions on loans to participators, benefits provided to participators, and distributions.

First accounts for private companies: 21 months from incorporation date or 3 months from accounting reference date, whichever is longer. Subsequent years: 9 months from accounting reference date for private companies, 6 months for public companies. Late filing triggers automatic penalties starting at £150.

Confirmation Statement due 12 months from incorporation or previous Confirmation Statement. Must file within 14 days of the due date. For example, if due date is 15 March, must file by 29 March. Late filing triggers penalties and can lead to company strike-off.

Advisory Fuel Rates (AFR) apply when employee uses company car for business - covers only fuel cost. Approved Mileage Allowance (AMA) applies when employee uses own car for business - covers all vehicle costs (fuel, insurance, repairs, depreciation) at 45p/mile first 10,000 miles, 25p thereafter.

Advisory Fuel Rates (AFR) are rates prescribed by HMRC for: (1) Calculating employee reimbursement to employer for private use of company vehicle, (2) Calculating employer reimbursement to employee for fuel expenses on business travel in company car. Rates updated quarterly, vary by engine size and fuel type.

Approved mileage allowance (also called approved mileage rates) are flat rates you can claim for business travel in personal vehicle instead of actual costs. Cars/vans: 45p/mile first 10,000 business miles, 25p/mile thereafter. Motorcycles 24p/mile. Bicycles 20p/mile. Covers all vehicle running costs.

Companies House dormant: No significant accounting transactions in financial year. Paying filing fees, penalties, or incorporation shares doesn't break dormancy. Corporation Tax dormant: Stopped trading with no other income (investment, rental), new company not yet started business, flat management company, or unincorporated association owing under £100 Corporation Tax.

Directors can be removed by: (1) Ordinary resolution of shareholders (requires special notice of 28 days), (2) Provisions in Articles of Association, (3) Automatic removal if bankrupt, mentally incapable, prohibited by law, or disqualified by court. Director being removed must be allowed to make representations. File form TM01 at Companies House within 14 days.

Memorandum of Association is a legal document signed by all initial shareholders or guarantors agreeing to form the company. It's a simple statement of intent to incorporate. Created automatically during company formation process and forms part of the constitutional documents, though Articles of Association are more important for ongoing governance.

Articles of Association are written rules governing how the company is run and managed, agreed by shareholders, directors, and company secretary. They cover: appointment/removal of directors, decision-making processes, rights and responsibilities of shareholders and directors, share issuance and transfer, meeting procedures, dividend distributions.

Penalties for late Corporation Tax returns: £100 if 1 day late, another £100 after 3 months, HMRC estimates tax bill and adds 10% penalty after 6 months, another 10% of unpaid tax after 12 months. If late 3 times in a row, £100 penalties increase to £500 each. Interest charged on all late tax payments.

A Balance Sheet (Statement of Financial Position) shows company's assets, liabilities, and equity at a specific date, usually financial year-end. Assets = Liabilities + Equity must always balance. Provides snapshot of financial health showing what company owns, owes, and shareholders' stake.

To process dividends: (1) Ensure sufficient distributable profits (retained earnings after tax), (2) Hold board meeting to declare dividend, (3) Issue dividend vouchers to shareholders showing company name, date, shareholder details, dividend amount, (4) Record in minutes and accounts, (5) Pay within reasonable time. Shareholders pay tax on dividends through Self Assessment if above allowance.

LOYALS provides: Corporation Tax preparation and filing, VAT returns and MTD compliance, PAYE payroll management, Self Assessment tax returns, CIS Scheme compliance, tax planning and optimization, HMRC investigations support, and R&D tax relief claims. Serving all London boroughs from £150/month.

LOYALS prepares: Micro-entity accounts for limited companies, LLPs, and CICs; Small-entity accounts with full disclosures; Dormant company accounts; Full statutory accounts; Management accounts; Amended accounts; and Abbreviated accounts. All prepared to Companies House and HMRC standards with iXBRL tagging for Corporation Tax.

To start a limited company: (1) Choose unique company name, (2) Have UK registered office address, (3) Appoint at least one director (over 16), (4) Have at least one shareholder, (5) Prepare Memorandum and Articles of Association, (6) Register at Companies House online (£12 same-day or £50 same-day), (7) Register for Corporation Tax within 3 months.

LOYALS handles complete company formation for London entrepreneurs from £150 including registration, bank account introductions, HMRC setup, and first year's compliance support across Westminster, Camden, Islington, and all London boroughs.

Yes, LOYALS provides complete cloud-based bookkeeping with real-time access to financial reports. Services include: transaction recording, bank reconciliation, invoice management, expense tracking, VAT return preparation, payroll processing, and monthly management reports. From £150/month for London businesses across all sectors.

LOYALS needs: (1) Company authentication code (6 characters from Companies House), (2) Company UTR (10 digits from HMRC), (3) Access to bookkeeping software OR bank statements for the period, (4) Previous year's accounts and tax return (if not first year), (5) Details of any significant transactions, loans, or investments.

LLP (Limited Liability Partnership) combines partnership flexibility with limited liability protection. Introduced by LLP Act 2000, popular with professional services (accountants, solicitors, consultants). All members have limited liability, must have at least 2 members, file annual accounts at Companies House, and submit partnership tax return (SA800) to HMRC.

Yes, LOYALS prepares amended accounts and tax returns from scratch for the period needing correction. Amended reports are filed at Companies House and HMRC to replace originally filed reports. We handle the entire amendment process including explanations to authorities and calculation of any additional tax or refunds owed.

Abridged accounts are simplified accounts filed at Companies House (public record) while full accounts go to shareholders and HMRC. They omit sensitive information like detailed profit and loss, directors' remuneration, and specific turnover figures. Available to small companies wanting privacy while meeting public filing obligations.

LOYALS makes switching seamless: (1) You sign Letter of Engagement with LOYALS, (2) We write Professional Clearance Letter to your current accountant requesting information handover, (3) Current accountant provides records and confirms no money owed, (4) We collect all documents, (5) We notify HMRC and Companies House of the change, (6) We take over all compliance from next deadline.

Typically completed within 2-3 weeks with zero stress or gaps in compliance. LOYALS serves 500+ London businesses across Westminster, Camden, Islington, and all boroughs.

Personal UTR is a 10-digit code completely unique to each UK taxpayer who is an individual. Whether you're a sole trader, earning untaxed income, part of a partnership, or a company director with income beyond PAYE, you need a personal UTR to file Self Assessment tax returns online or by post.

HMRC uses it to identify you for everything relating to your personal taxes. It's different from a company UTR (for limited companies). LOYALS helps London residents obtain and manage their personal UTRs for Self Assessment across Westminster, Camden, Islington, Hackney, Tower Hamlets, and all boroughs.

You must file Self Assessment if you're: (1) self-employed as a sole trader earning over £1,000, (2) a partner in a business partnership, (3) earned over £100,000, (4) have untaxed income over £2,500 (rental, savings, investments, freelance), (5) are a company director, (6) received foreign income, or (7) HMRC sent you a notice to file.

You may also file voluntarily to claim tax reliefs or prove self-employment for Tax-Free Childcare or Maternity Allowance. LOYALS helps London taxpayers determine filing obligations and handles complete Self Assessment preparation from £300 one-off or £50/month with year-round support including deadline reminders and HMRC correspondence handling.

Anyone who is self-employed earning over £1,000, a partner in a business partnership, has rental income from property, earned over £100,000, is a company director, has untaxed income over £2,500, receives foreign income, or wants to claim tax reliefs must file SA100.

Most employees paying tax through PAYE don't need to file unless they have additional untaxed income. LOYALS advises London residents across all 32 boroughs on Self Assessment obligations and handles complete tax return preparation with optimized expense claims and allowances to minimize tax bills legally.

Tax year runs 6 April to 5 April. Paper returns due by midnight 31 October following the tax year end. Online returns due by midnight 31 January following the tax year end. These deadlines never extend for weekends or bank holidays.

Missing deadlines triggers automatic £100 penalty immediately, regardless of whether you owe tax. Further penalties accumulate after 3, 6, and 12 months. LOYALS has never missed a client deadline in 500+ London businesses served. We file early to give you months to plan tax payments.

Payments on Account are advance payments toward next year's tax bill. If your Self Assessment bill exceeds £1,000 and less than 80% was deducted at source, you make two payments: (1) 31 January during tax year (50% of previous year's bill), (2) 31 July following tax year (remaining 50%).

This means 31 January is cash-intensive - you pay previous year's balance PLUS first payment for current year. You can reduce Payments on Account if income drops by claiming online or calling HMRC. LOYALS helps London taxpayers budget for tax payments and minimize Payments on Account when circumstances change.

You must keep sole trader records for at least 22 months after the end of the tax year the return is for. For example, 2024/25 tax year (ending 5 April 2025) records must be kept until at least 31 January 2027. If you file late, keep records for 15 months after you file.

HMRC may check records during investigations to verify expenses and income. Lack of records means disallowed expenses and higher tax bills. LOYALS provides cloud bookkeeping for London sole traders with automatic record retention and HMRC-ready reports anytime you need them.

Simplified expenses let sole traders and partnerships claim flat rates for vehicle costs, working from home, and using home for business, instead of calculating actual costs. Vehicle: 45p per mile (first 10,000 miles), 25p thereafter. Home office: £10-£26/month depending on hours worked.

Once you use simplified expenses, you cannot switch back to actual expenses for the same asset. Only available to businesses with turnover under £150,000. LOYALS analyzes which method saves London sole traders more tax - simplified vs actual expenses - and implements the most tax-efficient approach.

Sole traders and business partnerships that have no companies as partners can claim simplified expenses. Limited companies cannot use simplified expenses - they must claim actual costs. Simplified expenses are optional; you can choose actual expenses instead if they're higher.

Simplified expenses flat rates available for: (1) Business vehicle costs (cars, vans, motorcycles - 45p/mile for first 10,000 miles, 25p thereafter), (2) Working from home (£10-£26/month based on hours), (3) Living in your business premises (adjust private use based on rooms used). All other expenses must be claimed at actual cost.

Register for Self Assessment online at gov.uk if you've never registered before. HMRC will set up your online account and send your UTR within 10 business days (21 days if abroad). You must register by 5 October following the tax year you started trading (e.g., started trading July 2024, register by 5 October 2025).

If you've previously filed Self Assessment, re-register using form CWF1 with your existing UTR. LOYALS handles complete sole trader registration for London residents, ensuring you're set up correctly from day one with proper tax code notifications and HMRC account access.

Yes, you can amend your Self Assessment return online or by post within 12 months from the filing deadline (not from when you actually file). For 2024/25 tax year (deadline 31 January 2026), you can amend until 31 January 2027.

Corrections might increase or decrease your tax bill. If they increase it, you must pay the difference. If they decrease it, HMRC will refund you. LOYALS handles amendments for London taxpayers, ensuring corrections are made properly and any refunds are claimed promptly.

For 2024/25: Personal Allowance £0-£12,570 = 0%, Basic rate £12,571-£50,270 = 20%, Higher rate £50,271-£125,140 = 40%, Additional rate over £125,140 = 45%. Personal Allowance reduces by £1 for every £2 earned over £100,000, disappearing entirely at £125,140.

Scotland has different rates. Dividend and savings income taxed at different rates. LOYALS optimizes London taxpayers' income mix to minimize tax across all income types legally.

Paper returns: Midnight 31 October following tax year end. Online returns: Midnight 31 January following tax year end. For 2024/25 tax year (6 April 2024 to 5 April 2025): paper deadline is 31 October 2025, online deadline is 31 January 2026.

All Self Assessment tax must be paid by midnight 31 January following the tax year end. For 2024/25 tax year, payment deadline is 31 January 2026. This includes: balancing payment for previous year, first payment on account for current year, and second payment on account is due 31 July.

Keep sole trader accounting records for at least 5 years after the 31 January submission deadline of the relevant tax year. For 2024/25 return (filed by 31 January 2026), keep records until at least 31 January 2031.

Self Assessment tells HMRC about all your taxable income and claims all tax allowances and reliefs you're entitled to. It's how you report untaxed income, claim business expenses, and calculate final tax owed. Most employees don't file as PAYE collects all their tax, but self-employed people, landlords, and those with complex finances must file.

Advisory Fuel Rates (AFR) apply when using company car for business - covers only fuel cost as employer already pays for the car. Approved Mileage Allowance (AMA) applies when using personal car for business - covers fuel, insurance, repairs, MOT, depreciation (45p/mile first 10,000 miles, 25p thereafter).

Emergency tax codes (1257L W1, 1257L M1, or 1257L X) are temporary codes used when HMRC doesn't have enough information. W1 = weekly pay, M1 = monthly pay, X = either. These are non-cumulative, meaning tax is calculated only on current period's pay without considering year-to-date earnings, often resulting in overpayment.

Property allowance is a tax exemption of up to £1,000 per year for individuals with rental income. If rental income is under £1,000, no tax is payable and nothing needs declaring to HMRC. Over £1,000, you must file Self Assessment and choose between claiming property allowance OR actual expenses (whichever is more beneficial).

You make Payments on Account if your Self Assessment bill is over £1,000 AND less than 80% of your tax was collected at source through PAYE. Payments on Account don't apply if most tax is deducted through PAYE or you're in your first year of Self Assessment.

Everyone including students gets Personal Allowance of £12,570 (2024/25) - the amount you earn tax-free each year. If you earn over £100,000, personal allowance reduces by £1 for every £2 over £100,000. At £125,140 or more, you have no personal allowance and all income is taxed.

Once you claim simplified expenses for an asset, you cannot switch back to actual expenses for that asset during its lifetime. You must continue using simplified expenses. This is why LOYALS calculates both methods before choosing, ensuring you select the most tax-efficient approach from the start.

Construction Industry Scheme (CIS) is a tax deduction system where contractors deduct money from subcontractor payments and pass it to HMRC. Standard deduction is 20% for registered subcontractors or 30% for non-registered. Gross payment status (0% deduction) is available to qualifying subcontractors.

When contractors pay subcontractors, they verify status with HMRC, deduct the appropriate percentage, and pay the net amount. Deductions count as advance tax payments toward the subcontractor's annual tax bill, not final tax. LOYALS specializes in CIS for London contractors and subcontractors across all 32 boroughs.

CIS was introduced to prevent tax revenue loss from construction payments not being properly accounted for. It ensures subcontractors pay income tax and National Insurance by collecting tax at source through contractors, reducing tax evasion in the construction industry.

Step-by-step: (1) Contractor engages subcontractor, (2) Contractor verifies subcontractor with HMRC before each payment, (3) HMRC confirms deduction rate (0%, 20%, or 30%), (4) Contractor deducts tax and pays net amount to subcontractor, (5) Contractor files monthly CIS return to HMRC, (6) Contractor pays deductions to HMRC by 22nd of following month, (7) Subcontractor receives payment statement showing gross amount and deduction, (8) Subcontractor claims credit on annual Self Assessment or through PAYE.

LOYALS manages the entire CIS process for London contractors and subcontractors - handling verification, monthly returns, payment submissions, and annual reclaims. We've recovered £500K+ in overpaid CIS tax for London construction businesses.

Higher 30% deduction for non-registered subcontractors encourages registration with HMRC so they have verified records. It's a penalty rate designed to push subcontractors to register properly, making it easier for HMRC to track them and ensure tax compliance across the construction sector.

Contractors must file monthly CIS returns showing ALL payments to ALL subcontractors in the previous tax month (6th to 5th of month). Returns due within 14 days after the tax month end. Must be filed even if no payments made that month. File online using HMRC's CIS online service or compatible software.

Yes, exactly. Contractors fulfill statutory duty assigned by HMRC, acting as tax collectors. They verify, deduct, report, and pay deductions to HMRC on behalf of subcontractors. This lowers HMRC's burden and ensures proper tax collection across the construction industry.

Money deducted by contractors is paid to HMRC as advance payment toward the subcontractor's income tax and Class 4 National Insurance liability. It stands as credit in the subcontractor's account. When filing Self Assessment (or through PAYE for limited companies), the subcontractor claims credit for deductions and receives refund if overpaid.

Yes! CIS deductions are advance tax payments, not final tax. When you file Self Assessment (sole traders) or through PAYE (limited companies), you claim credit for all CIS deducted during the tax year. If CIS deductions exceed your actual tax liability after claiming allowable business expenses and allowances, HMRC refunds the difference.

Many subcontractors overpay because contractors deduct from gross payments, but you can claim expenses to reduce taxable profit. LOYALS clients across London receive average £3,200 refunds annually through optimized expense claims and proper CIS credit management.

Limited company subcontractors claim CIS deductions through monthly payroll (PAYE), NOT through Corporation Tax return. Submit FPS as usual, then submit EPS (Employer Payment Summary) showing total CIS deductions for year-to-date. HMRC offsets CIS against your PAYE bill. Any excess is refunded.

If PAYE bill is less than CIS deducted, carry forward to next month. LOYALS manages PAYE and CIS reclaims for London limited company subcontractors, ensuring maximum refunds and zero penalties from £150/month.

Self-employed subcontractors claim CIS deductions on their annual Self Assessment tax return. Record full amounts from invoices as income in the self-employment pages, then enter all CIS deductions in the 'CIS deductions' field. HMRC calculates your final tax bill and offsets CIS deductions. If CIS exceeds tax owed, you receive a refund by 31 January.

LOYALS optimizes expense claims for London self-employed subcontractors, maximizing deductions legally to ensure largest possible CIS refunds across Westminster, Camden, Islington, and all boroughs.

Not necessarily. CIS deductions offset your overall tax liability calculated on profits (income minus expenses). For sole traders: CIS credits against income tax and Class 4 NI. You get refund if CIS exceeds total tax bill. For limited companies: CIS credits against PAYE liability. Refunds are common when you have proper expense records.

The key is maximizing allowable expenses legally. LOYALS ensures London subcontractors claim all qualifying expenses - tools, materials, vehicle costs, insurance, protective equipment, training - to minimize taxable profit and maximize CIS refunds.

Two types: (1) Mainstream contractors - businesses in construction that pay subcontractors (builders, developers, labour agencies, gang masters, property developers). (2) Deemed contractors - not in construction but spend over £1 million average on construction in any 3-year period (housing associations, local authorities, government departments).

Contractors must register if they pay subcontractors for construction work OR spend over £1 million per year on construction even if not in construction business. Subcontractors should register to benefit from 20% deduction rate instead of 30%, and to be eligible for gross payment status (0% deduction) if they qualify.

A subcontractor is a person or company that performs construction work on behalf of a contractor. This includes tradespeople (builders, electricians, plumbers, carpenters, plasterers), labour-only providers, and companies providing construction services to main contractors or clients.

Contractors must pay CIS deductions to HMRC within 14 days of the tax month end (6th to 5th), or 17 days if paying electronically. For example, deductions for tax month ending 5 March must be paid by 22 March. Deductions must be paid even if not yet collected from clients.

CIS deduction rates: (1) 0% for subcontractors with gross payment status, (2) 20% for registered subcontractors, (3) 30% for unregistered subcontractors. Materials are excluded from CIS deductions - only labour and plant hire costs are subject to deduction.

Gross payment status allows qualified subcontractors to receive full payment without any CIS deductions (0% rate). To qualify, you must pass HMRC's compliance and turnover tests, prove you're in the construction business, and have clean tax record. You pay tax through Self Assessment or PAYE at year-end instead of having it deducted monthly.

LOYALS helps London construction businesses apply for gross payment status, ensuring they meet all qualifying conditions and maintain compliance to keep the status. This dramatically improves cash flow for growing businesses.

Yes, you can reclaim VAT on purchases made before VAT registration: up to 4 years for goods you still have or goods used to make other goods you still have, and up to 6 months for services. The supplies must be for business purposes only and for the business now registered for VAT.

VAT Flat Rate Scheme lets you pay VAT as a fixed percentage of your VAT-inclusive turnover based on your business type (ranging from 4% to 14.5%). First year of VAT registration gets 1% discount. Simplifies accounting but you generally cannot reclaim VAT on purchases except capital assets over £2,000.

Not suitable if you buy mostly standard-rated items, regularly receive VAT repayments, or make many zero-rated/exempt sales. LOYALS analyzes whether Flat Rate Scheme saves London businesses money compared to standard VAT accounting.

Standard VAT accounting period is 3 months (quarterly). HMRC assigns your quarters when you register. Some businesses can opt for monthly returns or Annual Accounting Scheme (one return per year). Your VAT return covers all sales and purchases in that accounting period.

VAT returns due 1 month and 7 days after the end of your VAT accounting period. For example, period ending 31 March has deadline of 7 May. Must file online through MTD-compatible software. Paper returns no longer accepted since Making Tax Digital implementation.

VAT payment due same day as return filing: 1 month and 7 days after period end. Payment must clear HMRC's account by deadline. Direct Debit payments automatically collected 3 working days after deadline (giving you extra time). Late payment triggers penalties and interest.

Annual Accounting Scheme: File one VAT return per year, due 2 months after your VAT year end. Make advance payments during the year (9 monthly or 3 quarterly instalments) based on previous year's VAT liability, with final balancing payment when filing annual return.

Monthly payments due at end of months 4, 5, 6, 7, 8, 9, 10, 11, and 12. Quarterly payments due at end of months 4, 7, and 10. Final balancing payment due within 2 months of year end when you submit annual return. HMRC tells you payment amounts and due dates in writing.

Input tax is VAT you pay on business purchases. You can usually reclaim it on your VAT return if the purchases are for business purposes. Claim on the return covering the period when you received the VAT invoice. Can also reclaim VAT on some pre-registration purchases within time limits.

Yes, if VAT-registered you must charge VAT on all taxable sales at the appropriate rate (standard 20%, reduced 5%, or zero-rated 0%). No option to decide not to charge VAT to certain customers. Must show VAT separately on invoices and account for it on VAT returns.

VAT (Value Added Tax) is a consumption tax added to most goods and services in the UK. Businesses with turnover over £90,000 must register and charge VAT on sales (output VAT), but can reclaim VAT paid on purchases (input VAT). The difference goes to HMRC.

Standard rate is 20%, reduced rate is 5%, some items are zero-rated, and some are exempt. LOYALS manages complete VAT compliance for London businesses including MTD registration, quarterly returns, and optimization strategies from £150/month.

Yes! Zero-rated supplies are still taxable supplies, just at 0% VAT rate. You can reclaim input VAT on purchases used to make zero-rated supplies. This differs from exempt supplies where you cannot reclaim input VAT.

Yes, if your taxable turnover (including zero-rated sales) exceeds £90,000 in rolling 12 months, you must register for VAT. Zero-rated supplies are taxable supplies charged at 0%, different from exempt supplies which don't count toward the threshold.

Standard rate: 20% on most goods and services. Reduced rate: 5% on domestic fuel, children's car seats, mobility aids. Zero-rate: 0% on books, newspapers, children's clothes, most food. Exempt: no VAT charged on insurance, education, health services, financial services.

Partly exempt businesses use the Capital Goods Scheme to claim input tax on capital assets. VAT recovery is adjusted over time based on taxable use. As taxable use increases, claim more VAT; as it decreases, repay VAT already claimed. Applies to buildings, computers, aircraft, ships over certain values.

No. VAT reverse charge applies to intra-EU transactions AND (from 1 October 2020) to specified domestic construction services. In reverse charge, the buyer accounts for VAT instead of the seller, preventing fraud and simplifying cross-border transactions.

Making Tax Digital (MTD) for VAT requires businesses with taxable turnover over £85,000 to keep digital records and file VAT returns using MTD-compatible software. Implemented from 1 April 2019. Paper returns and manual spreadsheets no longer accepted for most businesses.

LOYALS provides MTD-compatible software and complete VAT submission services for London businesses, ensuring compliance with digital record-keeping requirements and automated quarterly filings from £150/month.

Zero-rated: VAT charged at 0%, still taxable supplies, can reclaim input VAT, must report on VAT return (books, food, children's clothes). Exempt: No VAT charged, not taxable supplies, cannot reclaim input VAT, don't report on VAT return (insurance, education, health services).

A VAT group allows connected companies to file one combined VAT return under a single VAT registration. Transactions between group members are disregarded for VAT (no VAT charged internally). One member acts as representative, responsible for VAT compliance. Simplifies administration for corporate groups.

A VAT return reports all sales and purchases for the accounting period, showing output VAT charged, input VAT reclaimed, and the net VAT owed to or from HMRC. Filed quarterly (or monthly/annually if opted). Must use MTD-compatible software to submit returns digitally.

Yes, you can correct errors on past VAT returns if: errors are below the reporting threshold (£10,000 or 1% of turnover, whichever is greater), errors are not deliberate, and the return was for a period ending less than 4 years ago. Make corrections by adjusting your next VAT return or submit form VAT652 to HMRC.

VAT Flat Rate percentages vary by business type, ranging from 4% (food retailers, post offices) to 14.5% (accountants, architects, IT consultants). Limited cost businesses (spending less than 2% of turnover or £1,000/year on goods) pay higher rate of 16.5%. First year of VAT registration gets 1% discount on applicable rate.

A VAT number is a unique 9-digit identification number issued to VAT-registered businesses. UK VAT numbers have 'GB' prefix (e.g., GB123456789). You must display your VAT number on invoices, letterheads, websites, and all business correspondence. Different from your UTR or Company Registration Number.

Yes, it's mandatory (not optional) for VAT-registered businesses with taxable turnover over £85,000 since 1 April 2019. Must keep digital records in MTD-compatible software and file returns through digital links to HMRC. Paper returns no longer accepted. Penalties for non-compliance include fines and surcharges.

Almost anyone can be a UK company director. Requirements: Must be over 16 years old, not currently disqualified from being a director, not bankrupt (unless court permission granted), not subject to UK government restrictions. No specific qualifications required, making company formation accessible to most people.

As director, you're legally responsible for running the company, ensuring Companies House and HMRC filings are on time, maintaining statutory records, and meeting all compliance obligations. LOYALS helps London directors across Westminster, Camden, Islington, and all boroughs manage these responsibilities from £150/month.

Directors must: File annual accounts with Companies House (9 months after year-end), file Corporation Tax return with HMRC (12 months after year-end), file Confirmation Statement annually, maintain statutory registers (directors, shareholders, PSC, charges), ensure company has registered office in UK, keep accounting records for 6 years, report changes to Companies House within 14 days.

Failure triggers penalties starting at £150 per late filing, potential director disqualification, and personal liability for company debts in serious cases. LOYALS manages all director compliance obligations for London companies, ensuring zero late filings and protecting directors from personal liability.

A Person with Significant Control (PSC) is an individual meeting one or more conditions: holds over 25% of shares, holds over 25% of voting rights, has right to appoint or remove majority of directors, has right to exercise significant influence or control, or has control over a trust or firm that would meet these conditions.

All companies must identify and register PSCs, maintain a PSC register, and report PSCs to Companies House. Failure is a criminal offence. LOYALS ensures London companies maintain accurate PSC registers and report changes within required 14-day deadline.

A Confirmation Statement is an annual filing to Companies House confirming your company information is correct. It includes: director details, shareholder information, registered office address, share capital, SIC codes (business activities), PSC details, and trading status confirmation.

Due 12 months from incorporation or last Confirmation Statement, must file within 14 days of due date. Filing fee is £13 online or £40 by post. Even if nothing has changed, you must still file. LOYALS handles Confirmation Statements for London companies automatically, ensuring timely submission and zero penalties.

Confirmation Statement must include: (1) Company registered office address, (2) Director details (names, addresses, dates of birth), (3) Secretary details if appointed, (4) Shareholder information, (5) Share capital (issued shares and their values), (6) SIC codes (business activity codes), (7) PSC details, (8) Statement of capital, (9) Trading status of shares.

Yes! Every company including dormant and non-trading companies must file a Confirmation Statement annually. There is no exemption for dormant companies. Filing confirms Companies House has up-to-date information even if nothing has changed. Late filing triggers automatic penalties.

To activate a dormant company, inform HMRC within 3 months of starting trading. Sign in to company's HMRC Gateway account and register for Corporation Tax. You'll receive a Company Tax UTR and can then file active company accounts and Corporation Tax returns. Companies House is notified automatically through your accounts filing.

An umbrella company is a standard UK limited company acting as employer for contractors. Instead of contractors managing their own limited company admin, they become employees of the umbrella company which handles payroll, taxes, and HMRC compliance. The umbrella invoices clients and pays contractors as employees minus fees.

Benefits include reduced admin, but typically less tax-efficient than running your own limited company. Suitable for temporary contracts or contractors who don't want compliance burden. LOYALS advises London contractors whether umbrella or own limited company is more beneficial based on individual circumstances.

A Personal Service Company (PSC) is a limited company set up to provide services of a single contractor. Usually 100% owned by the contractor who is sole director. Provides limited liability protection, more professional image, and tax-efficient income extraction through salary/dividend mix.

Subject to IR35 rules which determine if you should be taxed as employee or genuine business. LOYALS helps London contractors set up and run PSCs compliantly, handling accounts, tax returns, and IR35 status determination from £150/month.

A Managed Service Company (MSC) is a company with separate owners and organisers managing a group of contractors. Unlike PSCs which contractors own and control themselves, MSCs are controlled by management companies. Subject to different HMRC regulations and generally less tax-efficient than PSCs.

Companies must keep accounting records for 6 years from end of the financial year they relate to, or longer if: records show transactions covering multiple accounting periods, company bought assets lasting over 6 years, Company Tax Return filed late, or HMRC started compliance check.

A company qualifies as small if it meets 2 or more of these: Annual turnover not more than £10.2 million, balance sheet total not more than £5.1 million, average of 50 employees or fewer. Small companies can file simplified accounts and may be exempt from audit requirements.

Micro companies meet 2 or more of: Turnover £632,000 or less, balance sheet total £316,000 or less, 10 employees or fewer. Micro companies can file minimal information accounts with most disclosures optional, providing privacy and reduced compliance costs.

Yes, you can apply to extend accounts filing deadline but only in exceptional circumstances like serious illness, fire, flood, or theft of records. Apply online at Companies House before the deadline with supporting evidence. Extensions rarely granted for general reasons like accountant delays.

Yes, change accounting reference date using form AA01 filed at Companies House before current accounts deadline. Can shorten accounting period at any time. Can only extend once every 5 years (except in first year or with court order). First accounting period can be up to 18 months long.

The authentication code is a 6-character alphanumeric code used to access Companies House WebFiling service. It allows you to file documents online, update company information, and manage statutory filings. Issued by Companies House when company incorporates and can be requested again if lost.

To close (strike off) a company, file form DS01 to Companies House signed by majority of directors. Company must not have traded or changed name in past 3 months, have no outstanding debts, and all assets distributed. Companies House publishes notice in Gazette; if no objections within 2 months, company is dissolved. Remaining assets pass to the Crown.

Alternatively, use formal liquidation if company has debts or complex affairs. LOYALS advises London companies on most tax-efficient closure method and handles entire strike-off or liquidation process.

Dormant company: Never started trading since incorporation. Non-trading company: Previously traded but currently inactive. Non-trading companies may still have transactions like paying penalties, bank charges, or receiving interest, which prevent dormant status. Dormant companies have no significant accounting transactions.

A close company is controlled by 5 or fewer participators (shareholders) or any number of participators who are directors. Most UK family-owned businesses are close companies. Special tax rules apply including restrictions on loans to participators, benefits provided to participators, and distributions.

First accounts for private companies: 21 months from incorporation date or 3 months from accounting reference date, whichever is longer. Subsequent years: 9 months from accounting reference date for private companies, 6 months for public companies. Late filing triggers automatic penalties starting at £150.

Confirmation Statement due 12 months from incorporation or previous Confirmation Statement. Must file within 14 days of the due date. For example, if due date is 15 March, must file by 29 March. Late filing triggers penalties and can lead to company strike-off.

Advisory Fuel Rates (AFR) apply when employee uses company car for business - covers only fuel cost. Approved Mileage Allowance (AMA) applies when employee uses own car for business - covers all vehicle costs (fuel, insurance, repairs, depreciation) at 45p/mile first 10,000 miles, 25p thereafter.

Advisory Fuel Rates (AFR) are rates prescribed by HMRC for: (1) Calculating employee reimbursement to employer for private use of company vehicle, (2) Calculating employer reimbursement to employee for fuel expenses on business travel in company car. Rates updated quarterly, vary by engine size and fuel type.

Approved mileage allowance (also called approved mileage rates) are flat rates you can claim for business travel in personal vehicle instead of actual costs. Cars/vans: 45p/mile first 10,000 business miles, 25p/mile thereafter. Motorcycles 24p/mile. Bicycles 20p/mile. Covers all vehicle running costs.

Companies House dormant: No significant accounting transactions in financial year. Paying filing fees, penalties, or incorporation shares doesn't break dormancy. Corporation Tax dormant: Stopped trading with no other income (investment, rental), new company not yet started business, flat management company, or unincorporated association owing under £100 Corporation Tax.

Directors can be removed by: (1) Ordinary resolution of shareholders (requires special notice of 28 days), (2) Provisions in Articles of Association, (3) Automatic removal if bankrupt, mentally incapable, prohibited by law, or disqualified by court. Director being removed must be allowed to make representations. File form TM01 at Companies House within 14 days.

Memorandum of Association is a legal document signed by all initial shareholders or guarantors agreeing to form the company. It's a simple statement of intent to incorporate. Created automatically during company formation process and forms part of the constitutional documents, though Articles of Association are more important for ongoing governance.

Articles of Association are written rules governing how the company is run and managed, agreed by shareholders, directors, and company secretary. They cover: appointment/removal of directors, decision-making processes, rights and responsibilities of shareholders and directors, share issuance and transfer, meeting procedures, dividend distributions.

Penalties for late Corporation Tax returns: £100 if 1 day late, another £100 after 3 months, HMRC estimates tax bill and adds 10% penalty after 6 months, another 10% of unpaid tax after 12 months. If late 3 times in a row, £100 penalties increase to £500 each. Interest charged on all late tax payments.

A Balance Sheet (Statement of Financial Position) shows company's assets, liabilities, and equity at a specific date, usually financial year-end. Assets = Liabilities + Equity must always balance. Provides snapshot of financial health showing what company owns, owes, and shareholders' stake.

To process dividends: (1) Ensure sufficient distributable profits (retained earnings after tax), (2) Hold board meeting to declare dividend, (3) Issue dividend vouchers to shareholders showing company name, date, shareholder details, dividend amount, (4) Record in minutes and accounts, (5) Pay within reasonable time. Shareholders pay tax on dividends through Self Assessment if above allowance.

LOYALS provides: Corporation Tax preparation and filing, VAT returns and MTD compliance, PAYE payroll management, Self Assessment tax returns, CIS Scheme compliance, tax planning and optimization, HMRC investigations support, and R&D tax relief claims. Serving all London boroughs from £150/month.

LOYALS prepares: Micro-entity accounts for limited companies, LLPs, and CICs; Small-entity accounts with full disclosures; Dormant company accounts; Full statutory accounts; Management accounts; Amended accounts; and Abbreviated accounts. All prepared to Companies House and HMRC standards with iXBRL tagging for Corporation Tax.

To start a limited company: (1) Choose unique company name, (2) Have UK registered office address, (3) Appoint at least one director (over 16), (4) Have at least one shareholder, (5) Prepare Memorandum and Articles of Association, (6) Register at Companies House online (£12 same-day or £50 same-day), (7) Register for Corporation Tax within 3 months.

LOYALS handles complete company formation for London entrepreneurs from £150 including registration, bank account introductions, HMRC setup, and first year's compliance support across Westminster, Camden, Islington, and all London boroughs.

Yes, LOYALS provides complete cloud-based bookkeeping with real-time access to financial reports. Services include: transaction recording, bank reconciliation, invoice management, expense tracking, VAT return preparation, payroll processing, and monthly management reports. From £150/month for London businesses across all sectors.

LOYALS needs: (1) Company authentication code (6 characters from Companies House), (2) Company UTR (10 digits from HMRC), (3) Access to bookkeeping software OR bank statements for the period, (4) Previous year's accounts and tax return (if not first year), (5) Details of any significant transactions, loans, or investments.

LLP (Limited Liability Partnership) combines partnership flexibility with limited liability protection. Introduced by LLP Act 2000, popular with professional services (accountants, solicitors, consultants). All members have limited liability, must have at least 2 members, file annual accounts at Companies House, and submit partnership tax return (SA800) to HMRC.

Yes, LOYALS prepares amended accounts and tax returns from scratch for the period needing correction. Amended reports are filed at Companies House and HMRC to replace originally filed reports. We handle the entire amendment process including explanations to authorities and calculation of any additional tax or refunds owed.

Abridged accounts are simplified accounts filed at Companies House (public record) while full accounts go to shareholders and HMRC. They omit sensitive information like detailed profit and loss, directors' remuneration, and specific turnover figures. Available to small companies wanting privacy while meeting public filing obligations.

LOYALS makes switching seamless: (1) You sign Letter of Engagement with LOYALS, (2) We write Professional Clearance Letter to your current accountant requesting information handover, (3) Current accountant provides records and confirms no money owed, (4) We collect all documents, (5) We notify HMRC and Companies House of the change, (6) We take over all compliance from next deadline.

Typically completed within 2-3 weeks with zero stress or gaps in compliance. LOYALS serves 500+ London businesses across Westminster, Camden, Islington, and all boroughs.