Limited companies

How the tax system works for companies.

We are often asked, 'Should I form a limited company?' The reality is that there is no easy answer. Each situation has to be judged individually. Our guide provides an overview of some of the key issues relating to a business trading as a limited company.

If time is an important factor, you can consider buying a ready-made company. The procedure will depend on the company formation agents', including online agents, requirements.

Details of how the tax system charges tax on a company car.

In many small companies, the owners are also the directors, and this gives considerable scope for a number of tax efficient ways to extract profits from the company.

The relief gives rise to an effective capital gains tax rate of 10% on capital gains of up to £10 million.

Expenditure incurred before the company year-end might reduce the current year's tax liability instead of next year's.

The rules which determine what expenses can be deducted from profit for tax purposes are essentially the same whether you operate as a limited company, sole trader or partnership.

Benefits in kind are assessed on all directors and employees whose salary and benefits combined are £8,500 or more.

Details of corporation tax rates and bands.

The tax system is replete with fines and penalties for those that do not file or pay on time. Make sure you do not become liable to any of these penalties.

A summary of the main allowances available. Please note that the 100% annual investment allowance on plant and equipment expenditure of up to £500,000 is available from April 2014 to 31 December 2015.

HMRC charge interest on underpayments of tax, and pays interest (repayment supplement) on overpayments.

In order to attract a deduction in computing the profits of a trade or business, any expenses must be incurred wholly and exclusively for the purpose of the trade.

There are over 100 forms prescribed by the Companies Act 2006. We list below these and include a link to all the forms which can be downloaded direct from Companies House.

Who is a director? What are their legal responsibilities?

It is essential that you keep your company's statutory records up-to-date. Do not underestimate the importance of these records - they are definitive proof of the company's legal existence and its members.

The position of company secretary in a private company is now optional. Thus a company can operate with a sole director.

Ideas on how you can reduce the time we take to prepare your year-end accounts.

A private company (not subject to insolvency proceedings) can apply to the Registrar of Companies to be struck off the register and dissolved.

As accountants and business advisers we get to know our clients very well. From our position, it is all too clear to us that many clients are too focused on 'today' to give serious thought to the future.

There are a number of schemes intended to encourage employers to make arrangements for their staff to travel to work by more environmentally beneficial means.