Category Archives: Limited Company

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Companies Act 2006

There are a number of changes coming into effect today, as a result of the Companies Act 2006, some of the main ones are listed below:

  • Deadline for filing accounts at Companies house is now 9 months after year end
  • Stricter rules on Company Names.
  • Director may file a service address (which may be the same as their residential address or the registered office) which will be on the public record rather than their residential address.
  • Introduction of a Single Alternative Inspection Location (SAIL)
  • Introduction of a Statement of Capital
  • Changes to some of the forms.

For further information, visit the Companies House website

Credit Checks

Before giving your customer credit, it is advisable to do some checks.  Below, in no particular order are some of the checks that could be made:

  • request a bank reference
  • request trade references
  • check the limited company’s details against Companies House
  • credit reference check
  • analysis of customer’s year-end accounts

You can ask for bank references, trade references (from your prospective customer’s other suppliers), you

Sales Invoicing

If you give your customers credit (and most businesses do), it’s important to get your invoicing and customer payments systems in order.  The obvious benefit is to aid cash flow and it is the first step to good credit control and fewer bad debts.

Some while ago, I posted about some basic details that need to be included on a sales invoice.  In addition, if the business is a limited company, the sales invoice must include:

  • the correct full company name (as written on the certificate of incorporation)
  • any “trading as” name or business name.
  • the names of the directors may also be included – but it is a case of naming all the directors or none at all.

Sole traders must give:

  • the business name, if the surname is not being used.
  • an address.

If the business is VAT registered, the VAT number must also be given.

It’s also important to send the invoices out as promptly as possible, particularly at month-end when many companies have a “cut-off” point and invoices received later are processed in the following month, resulting in later payment.

Are you inside or outside IR35

HMRC publishes an introduction and a list of guiding questions to help you to decide whether you fall inside or outside IR35.

You will need to examine whether IR35 applies on a “contract by contract” basis.  It is possible to have some contracts within IR35 and some outside IR35

The circumstances of your “intermediary” is also a factor.  For example, if the intermediary is a limited company – who owns the shares and in what proportion?

The wording of your contract and your working practises are also factors.  Although, it is worth knowing that there is no such thing as an “IR35-proof” contract.  In the event of an enquiry, HMRC would examine the reality of your situation, not just your written contract.

If you are a “borderline” case, it may be worthwhile consulting an employment law specialist to examine your contract, working practises

(“Inside IR35” – IR35 legislation applies to your circumstances
“Outside IR35” – IR35 legislation does not apply to your circumstances)

What is IR35

IR35 was first propsed in 1999 and was introduced into UK legislation in 2000. The primary aim has been to prevent the avoidance of tax and national insurance by trading through an intermediary (commonly a limited company) rather than being an employee.

Prior to IR35, individuals could form a limited company and invoice their “client”/”employer” and then have their own limited company pay them a minimum salary and take the remainder as dividends. This avoided national insurance and tax through PAYE on the dividend element.

How to Register as an Employer

It is generally possible to register as an employer by telephone or email (if special circumstances apply, you may have to register via and HMRC office).  Either way, you will need the following information to hand:

  • general information about yourself and your company (including your national insurance number and UTR number – unique taxpayer reference number)
  • information about your employees (including number of employees, date of first payment, frequency of payments)
  • if a limited company, then details about the company (registration number, UTR, registered office, directors’ personal details – including their national insurance numbers and UTR)
  • if a partnership, then details about the partnership (Limited liability partnership – LLP number, if applicable, partners’ personal details – including their national insurance numbers and UTR)