FAQs for a New Limited Company

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TOP QUESTIONS FROM A NEW LIMITED COMPANY

I get to meet lots of new start up businesses, and it is always exciting to hear their plans, ambitions, and dreams.

There are a few key questions that I am always asked when people have a new limited company

WHEN DO I NEED TO TELL HMRC?

You’ve set up the limited company via Companies House, you’ve had the confirmation emails that everything is live and you have had a letter from HMRC with your UTR reference .. but have you told them that you are actually trading? Within 3 months of starting to trade you need to ensure that you have told HMRC that you are trading and this is done via a CT41G form, but it can be done online. 

DO I NEED A SEPARATE BANK ACCOUNT?

Yes, when you have a limited company it is separate legal entity and so you need to have a separate account.  Because it is a separate legal entity, you need to open a business account & I have blogged about business bank accounts before. At the moment, the time taken to open a business account seems to vary between 5 days and 6 weeks (!) and there is little consistency within the banks either.

HOW DO I PAY MYSELF?

When you run a limited company you can pay yourself a mix of dividends, salary and benefits.

WHAT TAX DO I PAY AND WHEN?

The money that you take out of the business is subject to income tax, national insurance and dividend tax (depending on the level of dividends taken).  The company itself pays corporation tax at the prevailing rate – salary and any benefits are allowable business expenses for calculating taxable profit but dividends are paid out of post tax profits.

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AND look out for the 5 day new business e-course launching October!

 

Rachael Savage