A Huge Mess - Self assessment

by **trisnow** on Tue Jan 31, 2012 1:34 pm

Hi folks,

I really hope someone can give me a bit of advice here as I am beginning to realise how much of a pickle I am in here....

I started a company back in August 2010 (Ltd). I paid a company to set it up for me.

So I am the director of this company and I am the main source of income as a contractor/worker for governemnt services.

I worked and earned money for a month or so up to October 2010 for this company and the money went into the company bank account.

Health problems then caused me to cease work and I ended up claiming JSA or equivalent health benefit from September 2010 to February 2011.

From Feb 2011 I again earnt money as a contractor/worker for government services and the money went into the company bank account.

This work finished in Sep 2011 due to health again and I again ended up claiming JSA from October to end of Dec 2011.

I am now back in work from beginning of this month (Jan) as a contractor/worker for government services and the money is being paid directly into the company bank account.

The BIG BIG problems are that I now realise after looking around I have so much to do in terms of self assessment and tax returns. I wondered if somebody could answer these questions please?

1. Should I have registered for self assessment immediately in August 2010? I have seen today something about 120 days and I am now super worried as I still have not set up for self-assessment.
2. Can I set up for self-assessment today and (by some divine intervention) put together a tax return to miss the fine?
3. If I can do a tax return now, should I now be filing the tax year April 10 - April 11?
4. When doing a tax return, do I as a director pay myself a set wage or am I allowed to spend all the money I earnt as a contractor/worker apart from the tax and N.I? As in should I do a self-assessment but also another return for the Ltd company I trade as/work for?
5. If I do not pay tax now that I owe, what are the fines? Somebody told me £100 per day? That can't be right can it???

Sorry, I know you may read this thinking what an idiot but I am in such a pickle, I freely admit I DO NOT HAVE A CLUE when it comes to all this as you can probably tell and I can't believe all the hassle I have coming up in trying to reslove this.....

Any help or advice in answering my questions would be so much appreciated.

by **RAL** on Tue Jan 31, 2012 1:49 pm

trisnow wrote:1. Should I have registered for self assessment immediately in August 2010? I have seen today something about 120 days and I am now super worried as I still have not set up for self-assessment.
2. Can I set up for self-assessment today and (by some divine intervention) put together a tax return to miss the fine?
3. If I can do a tax return now, should I now be filing the tax year April 10 - April 11?
4. When doing a tax return, do I as a director pay myself a set wage or am I allowed to spend all the money I earnt as a contractor/worker apart from the tax and N.I? As in should I do a self-assessment but also another return for the Ltd company I trade as/work for?
5. If I do not pay tax now that I owe, what are the fines? Somebody told me £100 per day? That can't be right can it???

Sorry, I know you may read this thinking what an idiot but I am in such a pickle, I freely admit I DO NOT HAVE A CLUE when it comes to all this as you can probably tell and I can't believe all the hassle I have coming up in trying to reslove this.....

Any help or advice in answering my questions would be so much appreciated.

It is not that big problem but this needs to be sorted.

As you set up a limited company, you do not need to complete self assessment unless you are asked to complete. Did you receive any notification from the HMRC regarding the self assessment?

As you trade via limited company, you not to register as self employed as you are an employee / officer of the company.

Have you taken any money out of the company bank account?

You need to submit / file the company tax return (CT600) along with full statutory accounts to HMRC. Abbreviated accounts to the companies house.

You may have an obligation to file the payroll year end to the HMRC too. But all this depends on what you did and you are going to do.

I would not recommend to do DIY on companies accounts as they are bit complex compared to self employed accounts.

As you said the company was set up on Aug-10, so you have few months to complete and file the accounts. You can check due date for accounts at companies or you can pm your company name and I will have a look at and let you know the due date for accounts at companies house.

by **trisnow** on Tue Jan 31, 2012 2:18 pm

RAL wrote:
It is not that big problem but this needs to be sorted.

As you set up a limited company, you do not need to complete self assessment unless you are asked to complete. Did you receive any notification from the HMRC regarding the self assessment?

As you trade via limited company, you not to register as self employed as you are an employee / officer of the company.

Have you taken any money out of the company bank account?

You need to submit / file the company tax return (CT600) along with full statutory accounts to HMRC. Abbreviated accounts to the companies house.

You may have an obligation to file the payroll year end to the HMRC too. But all this depends on what you did and you are going to do.

I would not recommend to do DIY on companies accounts as they are bit complex compared to self employed accounts.

As you said the company was set up on Aug-10, so you have few months to complete and file the accounts. You can check due date for accounts at companies or you can pm your company name and I will have a look at and let you know the due date for accounts at companies house.

Wow, a little bit of pressure lifted from my shoulders with your reply RAL thanks.

I do not remember recieving anything from them about self-assessment. Having looked through I can't see anything.

Yup, I have taken money out of the bank account, I've basically just been using it as a normal bank account and using funds to live on? Am I completely wrong to have done that?

Is the company Tax return different to an annual return? I've noticed a few letters stating I need to submit the annual return?

What do I need to do today then? Nothing really as you don't think I need to do self-assessment?

But you recommend not doing company tax returns myself then and get an accountant to file them?

Do you know from the dates I have stated earlier when I would need to get this done by?

Many many thanks for your advice Ral.

by **RAL** on Tue Jan 31, 2012 2:46 pm

Filing first accounts.

6. How long do I have to file my company's first accounts?

If you are filing your company's first accounts and those accounts cover a period of more than 12 months, you must deliver them to Companies House:

within 21 months of the date of incorporation for private companies, or
within 18 months of the date of incorporation for public companies, or
3 months from the accounting reference date, whichever is longer.
The deadline for delivery to Companies House is calculated to the exact day.

For example, a private company incorporated on 1 January 2009 with an accounting reference date of 31 January has until midnight on 1 October 2010 (21 months from the date of incorporation) to deliver its accounts, not 31 October.

If the first accounts cover a period of 12 months or less, the normal times allowed for delivering accounts apply (see question 7 below).

So I think you would need to file the accounts in May-12.

Annual returns
Every company must deliver an annual return to Companies House at least once every 12 months. The company's director(s) and the secretary (where applicable), are responsible for ensuring that they deliver the annual return to Companies House within 28 days after the anniversary of incorporation of a company or of the anniversary of the made-up date of the last annual return.

If you do not deliver the company’s annual return, the Registrar might assume that the company is no longer carrying on business or in operation and take steps to strike it from the register.

I would think your annual return is already over due

If you do not complete companies house my struck off your company and you will not be able to operate the companies bank accounts. All asset belongs to the company goes to the crown.

by **trisnow** on Tue Jan 31, 2012 4:44 pm

Many thanks for your help here Ral, much appreciated.

by **RAL** on Tue Jan 31, 2012 5:06 pm

PM company name or number and I will pm you back with due dates.

by **mullet** on Tue Jan 31, 2012 7:41 pm

Yup, I have taken money out of the bank account, I've basically just been using it as a normal bank account and using funds to live on? Am I completely wrong to have done that?

If you maintain accurate business records and get the bookkeeping right (i.e. in order to identify personal expenditure and treat it correctly) then it is not a problem as such. The problem comes when all you have is the company bank statements, with an accountant having to pick their way through several months after the year end and trying to separate business and private income and expenditure.

Also, unless the company owes you money then it appears that you (as director) have failed to operate PAYE correctly on your income. And there could be all sorts of complications with declarable benefits and pecuniary liabilities. A fundamental point is that you and the company are separate legal entities. It is not as simple as putting "Ltd" after your business name and not changing how you run your business and private life.