Company Directors and Tax Responsibilities
A company director is responsible for ensuring the success of a company by using their skills, experience and independent judgement. In addition to following authorities provided to them within a company's constitution, they must also fulfil a range of legal requirements outlined in UK company law. In addition to common law, the duties of company directors are largely summarised and codified within the Companies Act, 2006. Among a director's legal duties and responsibilities are a range of tax-related reporting requirements.
Company and Accounting Records
The director of a limited company is responsible for ensuring company records are accurately kept. Any changes, such as the appointment of company directors or updates to the company's business address, must be promptly reported to Companies House and HM Revenue & Customs. Records must be kept for at least six years from the associated financial year. Records must be kept for longer if they cover more than one accounting period, a Company Tax Return was filed late, a compliance check has been initiated by HM Revenue & Customs, or the company purchased items that are expected to last over six years (for example, machinery or equipment).
A company director is responsible for ensuring records are kept about the company itself. Details must be kept with respect to the company's shareholders, directors and secretaries. A record must also be kept of shareholder votes and resolutions. Records related to company transactions related to the purchase of shares and loans or mortgages must also be maintained. Records must also be kept with respect to promises related to the repayment of loans and any indemnities.
Company directors are also responsible for ensuring financial and accounting records are kept and maintained. Records related to all money received and spent by the company must be kept. Records must also include details of any of the company's assets and debts, as well as any purchased and sold goods. Details on all stock owned by the company and stocktaking must also be recorded. These records, as well as any other financial records and information are used to complete and file an annual Company Tax Return.
Company Annual Return
A Company Annual Return must be submitted to Companies House each year. The return must be filed within 28 days of the anniversary date of the company's incorporation. Annual returns are submitted online or by post using paper forms. A company director is responsible for ensuring the Company Annual Return is filed on time. If a deadline is missed, Companies House may shut down a business or prosecute the company's director or directors. Failure to submit an annual return on time may also result in a director becoming disqualified from serving as a company director.
The Company Annual Return includes details about the company itself, such as the registered office address. It also includes the type of business and the type of limited company, the name and address of company directors, the name, and the address of the company secretary if one has been appointed. The return must also include details on the number and value of shares issued by the company and their owners. The location of the company's shareholders list and any records related to debentures (that is, a loan that the company has taken out with a promise to repay it within a specified time) must also be reported.
Self Assessments and Personal Tax Returns
A company director is legally required to register for self assessment with HM Revenue & Customs. This entitles the director to a Unique Taxpayer Reference (UTR) number that is used to submit an annual tax return. In order to register, a director must provide their National Insurance number, personal contact information, and business details such as the business address of the company. Once registered for self assessment, a company director will receive a letter from HM Revenue & Customs each year in April or May. This letter will inform the director that they must submit a tax return online or by post using paper forms. Failure to submit a tax return on time may result in fines and other penalties.
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