Posted on July 7, 2017

There is no requirement to use an accountant to fulfil the requirements to file your company accounts and tax returns, but you need to be mindful that penalties, which can be significant, are charged for missed deadlines and incorrect returns. Also a good accountant will minimise your tax liabilities.

A company is required to file a corporation tax return within 12 months of the end of its financial period, failure to do so will see fines. If you are late by up to three months you will incur a £100 fine to which another £100 will be added if you exceed three months, if you exceed six months HMRC will estimate your corporation tax bill, plus there will be a penalty of 10% of the unpaid tax if you exceed 12 months another 10% penalty will be added. If you fail to file your return on time for three years running, the £100 penalties will each increase to £500.

If you are VAT registered then you are required to submit a VAT return which is normally due one month and seven days after the end of your VAT period. If you fail to submit your VAT return or pay the full amount due then you will enter into a 12 month surcharge period. The surcharge rate increases everytime you default and varies between 2% and 15%. HMRC can also in cases of serious inaccuracy or carelessness increase penalties to up to 100% of tax understated or underclaimed also if HMRC send you an assessment, and its to low and you fail to correct them a penalty can be applied of up to 30% of the assessement.

Your company is required to file accounts with Companies House, these are due by nine months after the company’s financial year end. If you are late by up to one month there is a penalty of £150, if you are between one and three months then the penalty is £375, three to six months £750 and more than six months £1500. Penalties are doubled if you are late for two years in a row.

All company directors are required to submit a self assessment tax return. This is required to be filed by the 31 January following the year of assessment, provied you file online. There is a £100 peanlty for missing the deadline for up to three months.

To be able to prepare any of these returns you need to know the rules and keep on top of any changes, plus you need to have the time to take on the administration burden. A good accountant will do this for you, and generally save you some tax in the process.