To participate actively in business, it is often necessary to register a limited company. It provides an effective vehicle for the execution of enterprise. This type of company is private in nature. Also, it can be a sole proprietorship or a partnership. In the latter, the owners are only liable according to the amount of equity that they hold. Like any other enterprise, a limited company needs to perform accounting. Here is a general description of the accounting activities which it needs to implement.

Accounting requirements for a limited company

Statutory annual accounts: At every end of a financial year, a limited company needs to complete statutory annual accounts. These details are sourced from the companys financial records. The statutory annual accounts provide an in-depth view of the commercial activity that the limited company has engaged in. These statutory annual accounts are usually shared with Her Majestys Revenue and Customs (HMRC), all your shareholders and Companies House.

Company Tax Returns: This is a record of the taxes which a limited company needs to report to the HMRC. It is absolutely necessary to make these returns if the company reports a loss or has no taxes for that specific financial year. In Company Tax Returns, some accounting factors are determined. An example of these is the profit or loss for Corporation Tax. This is very different from the profit or loss which is usually indicated in statutory annual accounts. Also, a limited company is expected to calculate and pay a Corporation Tax bill. You can calculate it on your own or hire an accountant to do this for you.

Corporation Tax: This is an important element that is included when filing Company Tax Returns. The Corporation Tax is paid from all the profits that you make if you perform business as a limited company. This tax does not arrive as a bill. Instead, you must calculate it yourself. It applies to all trading profits. This tax also applies to any investments which you perform. Furthermore, if you sell any business assets at prices which are higher than they originally cost, these margins also attract Corporation Tax. This is applicable for all limited companies based in the United Kingdom (UK).


Company Tax Returns and Corporation Tax both have deadlines. These deadlines differ depending on the accounting element involved. Company Tax Returns have a deadline that is 12 months after the accounting period involved ends. For the Corporation Tax, your deadline is 9 months and a day after the conclusion of the associated accounting period. There are stiff penalties if you should miss on any deadline. Therefore, it is important to stay alert and aware of the deadlines associated with these accounting elements.

Limited companies in the UK have accounting obligations. They include statutory annual accounts, Company Tax Returns and Corporate Tax. These obligations have deadlines assigned to them. The process of calculating and filing them can be automated using Cloud accounting software. Not only does it manage the day to day commercial activity in your limited company, online accounting software also files all regulatory obligations automatically for you.

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