New Company Checklist – key tasks you need to do.


1. Register with HMRC

HMRC is responsible for collecting tax. Even if you don’t think you have to pay tax, as a new business you must register with them.
Find out more on the HMRC website


    Corporation tax is a tax on company profits. All new companies (whether you intend to make a profit or not) need to register with HM Revenue and Customs (HMRC) when you start trading.

    More details can be found on: GovUK


    PAYE (Pay As You Earn) is the system that HM Revenue & Customs (HMRC) uses to collect Income Tax and National Insurance contributions (NICs) from employees’ pay as they earn it. The term ’employee’ includes directors of limited companies. If you employ staff, you have a legal obligation to operate PAYE on the payments you make to your employees if their earnings reach the National Insurance Lower Earnings Limit (LEL). You will need to register for PAYE before the first pay day and keep a record of all salary payments made, including National Insurance Contributions (NICs). HM Revenue & Customs (HMRC) provides a form P11 for you to record these details.

    Directors of limited companies are normally classed as employees and have income tax and National Insurance contributions deducted from payments made to them by the business under the PAYE (Pay As You Earn) scheme. A company director, if receiving payment from the organisation, must also complete a self assessment tax return. This applies even if you are already taxed under PAYE. Exemptions exist for directors of charitable organisations and companies that are neither non-profit making nor trading.


    You must register for VAT if your annual sales are £70,000 or above and you may be able to voluntarily register if your sales are under £70,000. To register for VAT you will need to fill in one or more forms and submit them to HM Revenue & Customs (HMRC) for approval. You will then receive a VAT registration number and certificate.Most applications for VAT registration can be completed online. All other necessary VAT registration forms are available to download from the HMRC website.

    Read more



    2. Find out whether you need to pay business rates

    It’s important to find out whether you need to pay business rates from your local council and register for rate relief. Businesses and other organisations that occupy non-domestic premises pay non-domestic rates, often called business rates. If you use a building or part of a building for business, you may have to pay business rates. Even if you use a domestic property, you may have to pay business rates on the part that you use for the business. In England and Wales small businesses are entitled to small business rate relief if the rateable value of their premises is less than £18,000. Charities and other non-profit organisations can get their business rates bills reduced by 80 per cent. In some areas, you could claim 100 per cent discretionary relief.
    Read more info for Brighton & Hove


    3. Set up a system to keep financial records

    All companies are required by law to keep ‘sufficient’ financial records and keep them for six years. There are also a number of business benefits to be gained from keeping records. It saves you time, and therefore money, whenever you need figures to back you up. You can be confident that you’re only paying the tax you owe. It also helps you keep up to date with how much you owe and how much you are owed. The precise records your company needs to keep will depend on the type and size of your business, but the records must be adequate to enable you to send in a correct Company Tax Return. If your company does not keep records, HMRC can charge a penalty of up to £3,000.
    Read more


    4. Ensure that you understand your Memorandum and Articles of Association and run your organisation in accordance with them.

    Your governing document is a legal document and you must make sure that you run your organisation in accordance with it. Make sure that you and all directors are familiar with your governing document and make sure you refer to it whenever you’re not sure about procedure.

    Identify what it says about

    1. Annual General Meeting
    2. Election of directors
    3. Members appointment
    4. Procedures for decision making
    5. Keeping records

    You must hold an annual general meeting if your memorandum and articles say that you do.

    Co-operatives UK offers a useful range of template governing documents (BHSEN can accept no liability).


    5. Keeping records and informing Companies House

    Companies House offer detailed guidance which can be downloaded from their website.
    Companies House prefers companies use their webfiling service. There is an incentive in that it is cheaper where charges apply for annual returns etc.


    6. Submitting your annual return

    Every company must submit an annual return within 28 days of the anniversary of incorporation (called the made up date). Companies House will write to every company at its registered office when the annual return is due to be filed. You will need to use the online annual return form to make your return. There is a cost to making an annual return of £15 for an online return. If you are a Community Interest Company, you will also need to complete a community interest company report using form CIC 34 which should be submitted with annual accounts. The purpose of the report is to show that the CIC is still satisfying the Community Interest Test, and that it is engaging appropriately with its stakeholders in carrying out activities.
    Download CIC34 from the CIC regulator website


    7. Filing accounts and appointing an auditor

    All companies whether trading or not must complete and file annual accounts for each financial year. For new companies the year will end on the anniversary of incorporation but it is possible to change this date. Accounts should be filed with Companies House within 10 months of the date of incorporation. An auditor should be appointed if the organisation has a turnover of more than £90,000. If the turnover is between £90,000 and £250,000 the company can qualify for partial exemption. Community Interest Companies must send a community interest company report (see above) with their accounts.
    See the guidance booklet


    8. Liability Insurance

    If someone is injured or their property is damaged, the person or business responsible may be sued and held legally liable for the injury or property damage. Liability insurance is designed to protect your business against these costs.If your business has employees, it is likely that employers’ liability insurance is compulsory. However, there are a few instances where insurance is not compulsory.An insurance broker can advise you on what specific insurance you need. Search for a local broker on the British Insurance Brokers Association website


    9. Ensure you comply with health and safety requirements

    You have a legal responsibility for the health and safety of your employees and anyone else, eg customers, who may be affected by your business and its activities. Health and safety is about preventing people from being harmed at work or becoming ill, by taking the right precautions and providing a satisfactory working environment. If you have employees or if customers and the public have access to your premises, you may have to register with the Health & Safety Executive (HSE) or with your local authority.
    Consult the Health and Safety Executive, and see useful advice and guidance here


    Disclaimer : Please note that this checklist is not exhaustive. Information is correct at June 2014.
    BHSEN cannot accept any legal responsibility for how this information is used.

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