So I’ve Set Up A New Limited Company – What Next?
Many businesses choose to incorporate for several reasons, including liability protection and tax planning.
But what should you do next, once you have gone through the initial effort of setting up your new limited company?
Within a few weeks of incorporating you will receive an introductory letter from Her Majesty’s Revenue and Customs. You should send back:
- Form 64-8 – You can provide HMRC with your accountant’s details by completing this form. It is important that this is submitted promptly, as HMRC will not discuss your affairs with your accountant without one.
- If your company is dormant, simply write back to HMRC at the address shown on their letter to tell them so. You won’t then need to file any tax returns for your dormant company unless/until it starts trading.
Once you start trading there will also be tax planning issues to consider, including:
- Goodwill valuation – If you have incorporated a sole trade or partnership business you may be able to include the cost of buying the reputation of your business from you personally. This cost, set off over a number of years, may also be allowable against corporation tax if the sole trade or partnership started after 2002.
- Remuneration planning – How are you going to pay yourself? It would normally be appropriate to register your company as an employer so that you can pay yourself a basic salary. You will also need to consider when you will be able to pay dividends, how much you could pay and be able to deal with the required dividend minutes and warrants.
- VAT registered status – You may need to consider registering the company for VAT. There are a number of different VAT schemes that could be appropriate, each with its own benefits.
It is always good practice to plan in advance, and although many of the above issues may appear daunting to tackle, we at Green & Co can provide you with the support needed to make this a stress-free process.
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.
Image courtesy of Stuart Miles at FreeDigitalPhotos.net