accounting and tax

aRo

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ok I'm going back to permie work(hopefully) after being a contractor for a while. My accountant wants to charge me £150 a year to keep my ltd company dormant in case I go back to contracting. I do want to keep my ltd company's name though so keeping it dormant is a good idea.

But...

1. I think £150 is a lot - is anyone doing this and is it easy to do?
2. What will happen with my tax returns? When I was permie before I never did any self assessments only when I became a contractor and this was done by my accountant. Do i still need to do this or not anymore since I will be a permie?

3. If I'm not doing tax returns anymore - how do I declare my extra income received from renting a house?

I guess what I want to do is get rid of paying my accountant who wants to also charge me an extra £150 a year to include my rental income in my tax returns.

many thanks
 

Spectre

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I do something similar but can't type much at the moment, I'll continue tomorrow if I think of more (and aren't typing in a position where I'll need an osteopath).

If you are a director of a limited company then your tax affairs will include filing a self assessment, even if the company is dormant.

Dormant companies still require some maintenance paperwork. Annual return, PAYE P35 (even if £0), maintain the bank account... An Annual Return will cost you £15 anyway. You need to contact the companies tax and corporation tax people (corporation tax is mandatory for limited companies even if you pay £0) and tell them it is dormant or you will get big scary forms if you have no agent.

Contact your tax office (this is easier said than done these days, some don't have external lines!) and make sure your tax codes are correct. IE. Make sure you aren't paying BR on your non-director job (get director position set to BR). Your most recent employment usually becomes your primary but there can be complications, as I have experienced.

How much did he charge when doing your books?
 

aRo

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I do something similar but can't type much at the moment, I'll continue tomorrow if I think of more (and aren't typing in a position where I'll need an osteopath).

If you are a director of a limited company then your tax affairs will include filing a self assessment, even if the company is dormant.

Dormant companies still require some maintenance paperwork. Annual return, PAYE P35 (even if £0), maintain the bank account... An Annual Return will cost you £15 anyway. You need to contact the companies tax and corporation tax people (corporation tax is mandatory for limited companies even if you pay £0) and tell them it is dormant or you will get big scary forms if you have no agent.

Contact your tax office (this is easier said than done these days, some don't have external lines!) and make sure your tax codes are correct. IE. Make sure you aren't paying BR on your non-director job (get director position set to BR). Your most recent employment usually becomes your primary but there can be complications, as I have experienced.

How much did he charge when doing your books?

lol thanks I understand.

I pay him £74 per month. He wants to charge me £150 a year for including the rentals income on a house i rent out. My company's anniversary is end of september but not been working since end of Apr but I still pay him until september so he will do my returns due next year.
 

Spectre

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£74 a month sounds quite a bit but I guess he was doing everything including PAYE etc. You would have to do that yourself but you could apply to do it once a year rather than monthly.

If you remove him as your agent it isn't too bad, everything can be done online and is relatively painless. I keep meaning to write a list to remind me of the order these returns need to be done, I'll get there someday.

Do you have your memorandum and articles of association and shares certificate etc? He's not acting as your company secretary is he?
 

aRo

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He tells me how much I need to pay PAYE, corporation tax. I do my own vat.
He does all my returns too.
He is not acting as company secretary as I have all the documents and everything is sent to me (getting oh so much paperwork lol). Anything I dont understand I just contact him. Sometime he gets sent a copy.

So is £150 a year to keep a company dormant worth it?

Also what do you do in terms of your tax return?

thanks for the help
 

Spectre

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Keeping the company dormant is easy as long as you don't lose login details for the Companies House site ;). It's a bit of a hassle remembering and getting around to things but it isn't much work really. I suppose you would get peace of mind knowing it was getting done for you.

Company tax return? Nothing, I phoned them and told them I was dormant, no requests for them now.
 

aRo

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Last 2 questions Spectre (I'll ask my accountant too but I want to be clued up so that he doesnt give me any BS).

As a contractor you or your accountant would have done your self assessment - what happens when you became a permie - you said contact tax office - will they tell me what I would need to do etc i.e. stop doing returns?

If i go back to not having to do tax returns - how do you submit extra income (my rental income).

thanks!
 

Spectre

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Whenever you have complex tax affairs such as working for someone else while being a director you need to file a self assessment. I think you would need one if you were just a director anyway.

Even though your company will be dormant you are still a director and would need SA.

There are places on the SA form to tell them about income from property etc.

It might be worth contacting HMRC to explain your situation to them. Make sure your director income (£0) is taxed at BR and not your primary! I'm not sure how rental income fits in to taxation though.
 

Mick

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Only problem is chopping and changing accountants is not a good thing. A friend of mine told me once that he changed his accountants and straight away was investigated.

I pay my accountants almost 2 grand a year. but they do everything, its so stressful for me to do the work on the books and everything, wages, paye, CIS!!!

Its not like I pay the 2 grand it goes against your earnings, and if your accountant is worth there salt it will pay for itself.

Mickie
 

aRo

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Only problem is chopping and changing accountants is not a good thing. A friend of mine told me once that he changed his accountants and straight away was investigated.

I pay my accountants almost 2 grand a year. but they do everything, its so stressful for me to do the work on the books and everything, wages, paye, CIS!!!

Its not like I pay the 2 grand it goes against your earnings, and if your accountant is worth there salt it will pay for itself.

Mickie

yes its the only reason I've stuck with him for more than 2 years now- even though he missed out some of of my previous earnings on my self assessment and I got investigated and had to pay a fee. Fee was minimal and he cancelled some of the fees to cover it etc.

Also - when you change accountants, there is a code of conduct that the new accountant must follow too before being able to take you on.

Fortunately, I'm going permie now and was thinking of just cancelling him rather than taking somebody else.
 
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