The limited company and tax

When setting up a new business, you have to decide what format your business will take. If you decide to form your business as a limited company, there are some requirements you will need to follow to notify the right people (Companies House). We explain below why you need to notify Companies House and the tax implications for running your business as a limited company.

The limited company and tax

Companies House informs HMRC of a new company

If you are going to trade as a sole trader
or partnership you don’t have to register
with Companies House. However, if you
intend to form a limited company you
must register with Companies House. The
main offices are in Cardiff and London with
several regional centres across the UK.

Companies House informs HM Revenue
and Customs (HMRC) when any limited
company is formed and registered with
them. But if you use the Companies
House Web Incorporation Service and
your company is ‘active’ at the time you
incorporate it ie, it has started trading or
receiving income, you can choose to
supply the statutory information to HMRC
at the same time that your business
becomes active.

HMRC uses the information it receives from
Companies House to set up a computer
record for your company and allocates it
a reference number known as a Unique
Taxpayer Reference (UTR). They then send
form CT41G (Corporation Tax – Information
for New Companies) to your company’s
registered office. This form includes your
company’s UTR so you need it to keep
it safe as you will need it whenever you
contact HMRC. It also tells you what you
need to do once your company is active
and suggests other tax implications your
company may need to consider.

It’s important that you read form CT41G
carefully and promptly take any action
that’s needed.