Becoming a business owner of a limited company has many steps, of which incorporation is just one of the first. So, after you have incorporated your company in the United Kingdom, one of the next things that a business owner should do would be to register for tax. Tax UK is an important step in owning a business. Business owners should register their new company for the Corporation tax. It is also important that the business is registered for PAYE and for VAT. These registrations can be done online through the HMRC website.
How do you register for tax after company formation?
When a company has already been formed, the very first thing to do would be to register it with Companies House. The business owner would need to fill out the IN01 form and send it to Companies House. Or if that is too much of a hassle, another option would be to use company formations agent. Once the registration is approved, the business owner would be receiving a certificate of incorporation which would indicate the date that the business was incorporated and a unique company registration number. Companies House would also have to inform the HMRC about this new company. The HMRC would be sending a letter to all new companies. In the letter, the business owner can find the Unique Taxpayer Reference (also known as the UTR) which is specific to the company and would have 10 digits.
What is Corporation Tax?
The business owner should also keep in mind that the company should be registered for corporation tax which can be done online. This should be done within the first three months that any activities have started for the business. To do this, a business owner should make a user ID and password for the Government Gateway. To be able to accomplish this, the owner should have the UTR, the Tax Office Number (this is made of three digits and comes right before the UTR and can be found from the HMRC letter), the date that the company became active, the date for making up all annual accounts, the main place of business of the company, the nature of the business’ activities, the names of all directors of the business, the addresses of all directors of the business, the company name, and the company’s registration number. In seven days of the HRMC verifying the registration of the Corporation Tax, business owners receive an activation code (which is a PIN) at the office address registered. Owners should activate the online services of HMRC as soon as receiving this code or else it expires. HMRC will be using the information provided by business owners to know the accounting period for Corporation Tax as well as deadlines for Company Tax Returns filing and Corporation Tax payments.
What is VAT?
Owners can register their businesses for VAT via the internet. Completing the registration form would need these details: the company name, the registration number, the country of incorporation, the company’s business activities, the date of incorporation of the business, the business’ contact details, any information about the business’ turnover, as well as details about the person making the registration in behalf of the business. After this is done, business owners would receive their VAT certificate in 30 working days. There are times though when this may take longer than 30 working days. Business owners then would be required to have their online VAT account by registering for it via the HMRC. To do this, the following details would be required: the registration number for VAT, the date of effectivity of registration of VAT, and the postcode of the business’ address. These details can be found on the VAT certificate.
What is PAYE?
A business should be registered with the HMRC as employer to be able to pay the wages of the employees and the director/s and have the Income Tax and National Insurance deducted from the wages. This is because this would mean that PAYE is setup for the payroll of the business. PAYE is a system utilized by the HMRC to be able to collect the Income Tax and the National Insurance Contributions of employees straight from the employer during paydays. To register as employer, a business owner should answer a number of questions about the business. The owner should also sign in to their Government Gateway account, and then complete the form available there. After the processing of the application, the HMRC would then send to the business’ registered address the employer reference number as well as the tax office reference number. These are important information needed for the company payroll and the PAYE submissions sent to the HMRC. It is important that employers are registered before the very first payday. The PAYE reference number used by employers would be received by the business owner in five working days.
What are Pension Schemes?
Business owners are also required to have a workplace pension scheme as employer so they can make contributions to their employees who are over 22 years old, who work in the UK, and are earning £10,000 at least annually. 3% of the earnings of each employee should be paid by the employer to the employee’s pension scheme. For more information on Pension schemes you can visit the government website here.
What is Self-Assessment?
Self assessment is a system that the HMRC uses to collect the personal tax from dividends and other income sources that do not get taxed by the PAYE. To register, a form from the HMRC should be completed online. A person that is registered should remember to make their own annual tax returns. The HMRC will remind people registered under self assessment through a letter that they should prepare their Self Assessment Tax return. After registering, the person will receive their person UTR number in a few days. This will be used to setup an account online that would allow them to have access to the Self Assessment service.
These are the basics that people need to know about how to register for tax. Tax UK for individuals and for forming UK company are different and have different types of taxes to register for.
published under Business Address Guides
