Freelancer's Question: I set up my own company only recently and am beginning to wonder if I need to get a tax accountant to work out things such as dividend payments. Also, do I need to notify HM Revenue & Customs (HMRC) of my new status? For tax and other company issues, are there general guidelines for start-ups?
Expert's Answer: Shortly after you incorporated the company you should have received form CT41G from HMRC, where you tell the Revenue more about the company. The form, which would have been sent to the company's registered office, provides HMRC with details of your company directorship.
It is recommended that you find an accountant to help deal with your salary and dividends. Usually, dividends are paid by reference to the last set of statutory accounts. Where these are not available or where the last set does not show sufficient accumulated profits to pay a dividend, this can be done by reference to interim accounts. The interim accounts should be prepared on the same basis as full accounts.
In practice, you should be careful to make sure that provision has been made for all costs not yet paid, including corporation tax on the profit made by the company.
There is plenty of useful guidance. Companies House has a number of booklets, including two on the life of a company and the associated filing requirements. More details are available.
The HMRC website has advice for new companies on corporation tax and registering for PAYE and VAT. Other organisations, such as Business Link, also have guidance for start-up businesses.
The expert was Jon Sutcliffe, tax partner at Kingston Smith LLP.
Jun 28, 2010
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