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inactive UK company tax questions

piliwash
Posts: 2
Joined: Sat Apr 15, 2017 4:51 pm

inactive UK company tax questions

Postby piliwash » Sat Apr 15, 2017 4:54 pm

Hello everybody,

I am a US resident and pay my taxes for the US IRS.

I have a UK company incorporated in 2016, I need to fill for taxes but my company did not do any trade - sale or anything till this year 2017.

Can somebody give me some insights how to properly work on my 2016 taxes ? I do not have a VAT by the way.

Thank you all.

bd6759
Posts: 2072
Joined: Sat Feb 01, 2014 3:26 pm

Re: inactive UK company tax questions

Postby bd6759 » Sat Apr 15, 2017 7:02 pm

UK companies pay tax in relation to accounting periods, not calendar years. Your first accounting period will have started when you first started trading and will end on the date you draw your accounts up to, or after 12 months, whichever comes sooner. You need to inform Companies House of the date your accounts will be drawn up to, and inform HMRC of that date and the date your accounting period started and will end.

For personal tax, it will depend on the amount of income, either salary or distribution of profits, that you took from the company.

piliwash
Posts: 2
Joined: Sat Apr 15, 2017 4:51 pm

Re: inactive UK company tax questions

Postby piliwash » Sat Apr 15, 2017 7:41 pm

bd6759 wrote:UK companies pay tax in relation to accounting periods, not calendar years. Your first accounting period will have started when you first started trading and will end on the date you draw your accounts up to, or after 12 months, whichever comes sooner. You need to inform Companies House of the date your accounts will be drawn up to, and inform HMRC of that date and the date your accounting period started and will end.

For personal tax, it will depend on the amount of income, either salary or distribution of profits, that you took from the company.



Alright, so since I did not make any trade till 2017, I do not have to fill for 2016 taxes ?

For Personal tax, I live in the US, do I have to report personal tax for HMRC as well ?

bd6759
Posts: 2072
Joined: Sat Feb 01, 2014 3:26 pm

Re: inactive UK company tax questions

Postby bd6759 » Sun Apr 16, 2017 1:10 pm

piliwash wrote:
bd6759 wrote:UK companies pay tax in relation to accounting periods, not calendar years. Your first accounting period will have started when you first started trading and will end on the date you draw your accounts up to, or after 12 months, whichever comes sooner. You need to inform Companies House of the date your accounts will be drawn up to, and inform HMRC of that date and the date your accounting period started and will end.

For personal tax, it will depend on the amount of income, either salary or distribution of profits, that you took from the company.



Alright, so since I did not make any trade till 2017, I do not have to fill for 2016 taxes ?

For Personal tax, I live in the US, do I have to report personal tax for HMRC as well ?

As stated, there is no such thing as 2016 taxes for companies. Taxes are based on your accounting periods. You need to inform HMRC what your accunting period will be. Both Companies House and HMRC will be looking for a return covering the first 12 months from the date of incorporation unless you tell them differently.

Personal tax is paid in tax years. These run from 6 April to 5 April. You may be liable for personal tax for the year ended on 5 April 2017.

You should enagage a UK accountant to help you with your reporting requirements.

SteLacca
Posts: 179
Joined: Fri Aug 07, 2015 2:17 pm

Re: inactive UK company tax questions

Postby SteLacca » Tue Apr 18, 2017 10:09 am

If the company hasn't traded at all, then you can simply file dormant company accounts with Companies House and inform HMRC that the company has not started trading.

If you have no UK income then you currently have no obligation to report any personal tax to HMRC in the UK. Even once you do start to receive income in the UK, as a non-resident you will only be required to report income arising on the UK. Presumably you will also have to report this to the IRS, though double taxation relief should be available in the US to avoid paying the same tax twice.

bd6759
Posts: 2072
Joined: Sat Feb 01, 2014 3:26 pm

Re: inactive UK company tax questions

Postby bd6759 » Wed Apr 19, 2017 7:34 pm

SteLacca wrote:If the company hasn't traded at all, then you can simply file dormant company accounts with Companies House and inform HMRC that the company has not started trading.
He can't do that. The company isn't dormant.

SteLacca
Posts: 179
Joined: Fri Aug 07, 2015 2:17 pm

Re: inactive UK company tax questions

Postby SteLacca » Fri Apr 21, 2017 3:19 pm

If it's never done anything, how is it anything but dormant.

Granted, if there has been a period of activity and now it's stopped it is simply inactive, but that's not how I read it. I read that it was incorporated and that was it. Nothing since.

bd6759
Posts: 2072
Joined: Sat Feb 01, 2014 3:26 pm

Re: inactive UK company tax questions

Postby bd6759 » Sat Apr 22, 2017 11:07 am

SteLacca wrote:If it's never done anything, how is it anything but dormant.

The OP says twice in his posts that it started trading in 2017

SteLacca
Posts: 179
Joined: Fri Aug 07, 2015 2:17 pm

Re: inactive UK company tax questions

Postby SteLacca » Tue Apr 25, 2017 4:06 pm

Oops - head hung in shame - missed that.


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