The 4 Big Benefits of Being VAT Registered

Updated on May 21, 2022

The 4 Big Benefits of Being Vat Registered

Small enterprises can take advantage of four major advantages by voluntarily registering for VAT. Currently, UK-based businesses must register for VAT if their annual revenue is £83,000 or higher.

VAT (Value Added Tax) is a tax levied by the UK government on products and services. The ordinary VAT rate is currently 20%, the reduced rate is 5%, and the zero rate is 0%.

Most goods and services will be subject to the usual rate of VAT. Businesses such as children’s car seats and energy providers will benefit from the lower pricing. Food and children’s clothing will be tax-free.

So, what are the advantages of being VAT registered for a small business?

Table of Contents

1. You get a VAT registration number

Although it may not seem thrilling, posting your VAT registration number on all of your documents, website, and stationery can help your business. This might help your company gain reputation and project a more trustworthy and professional image.

2. You can claim VAT refunds

You can claim VAT on all items and services your company purchases once you’ve registered. This must be evaluated against what your company charges and receives in VAT payments throughout the year. You may be eligible to reclaim a significant amount of VAT if you have invested in equipment, plant, machinery, or information technology.

When it comes time to file your VAT return, you might be surprised to learn that the HMRC actually sends you money!

3. You can reclaim VAT from the past

You may be able to claim VAT for products that you haven’t used in the last four years if you register for VAT. This would necessitate you being in business for this long and keeping VAT invoices and records during that time.

4. You can improve your business image

Another advantage of being VAT registered for a new small business is that most individuals are aware of the VAT threshold. By showing your VAT number, you give the impression to your potential clients that you are larger than you are.

This could also assist you when interacting with other businesses. If you can generate a proper VAT invoice, some businesses prefer it.

The Bottom Line

As a small business, you might be interested in these four major advantages of VAT registration. Keep in mind, too, that you’ll need to keep proper records and file regular VAT returns. There are numerous software solutions for VAT, or your accountant can assist you.

Top 5 Cheapest Businesses to Start in 2017

There are several aspects to consider while looking for the cheapest businesses to start. These criteria include the ability to afford marketing, advertising, and the creation of a website, social media channels, and other associated activities.

However, we’ve identified the top five most affordable businesses to start in 2017.

1. Blog / Magazine website

This one takes the cake for people with a knack for writing who are looking for a low-cost business opportunity. You can build a blog or magazine website using WordPress for roughly £10-£15 for a name and web hosting (around £10 per month).

WordPress is a free Content Management System (CMS), and blog/magazine themes range in price from zero to fifty pounds. If you can understand Search Engine Optimization (SEO) and are comfortable with social media, this is a low-cost way to start your online job.

All you have to do now is create the website by adding original content and set up some advertising using Google’s Adsense and Affiliate Programs. Earnings range from £50 per month to £10,000 per month for the top performers.

2. Pet Sitting / Walking

You may start a pet sitting business on the cheap if you are an animal lover. All you need to do is distribute leaflets in the neighbourhood, speak with people you already know who have pets, and even start a Facebook page.

There are also websites that will verify your credentials and allow you to register so that folks looking for this service may discover you. They also provide feedback.

Pet Sitters charge £7 to £10 every visit, and overnight pet boarding costs roughly £15 to £25 per night.

3. Window Cleaning

Although a crowded business, becoming a neighbourhood window cleaner is rather inexpensive. A bucket, a scraper, a sponge, some towels, an extending tool set, and some diluting window washing fluid are all that’s required. Begin with people you already know, and if you do a great job, they will recommend you to their friends, coworkers, and family members in your neighbourhood.

Window cleaners charge between £10 and £20 per house, with the top earning £180 a day, or £43,200 per year. Despite the fact that they can clean a three-bedroom house in ten minutes and have a large clientele.

Commercial cleaners can expect to make roughly £50 per hour, or £375 per day or £90,000 per year. For a single-operator firm, however, the minimum start-up expenditures can be around £5000.

4. Tutoring

Tutoring may be for you if you have attended university and have specific expertise about a subject, or if you have worked in an area that others would like to learn, such as marketing, or if you are talented at playing the guitar. Supermarkets and classified ad websites are both good places to advertise.

The startup fees for this type of business are typically low, and the ideal place to start is with people you already know. You may create some social media accounts and canvass the local area.

If you’re dealing with children under the age of 18, you’ll need a DBS check to prove your good character, and the classes must be supervised by a parent or legal guardian. This will increase your trustworthiness and safeguard you.

Tutors can make between £20 and £50 per hour and offer courses with prices ranging from £100 to £500 per student, depending on the field, demand, competition, and your own qualifications and experience.

5. Car Valeting

Car valeting, like window cleaning, requires little equipment to get started and can be done on a shoestring budget. Car shampoo, polish, cloths, sponges, a bucket, interior polish, car window cleaner, chamois leather, a vacuum cleaner, outdoor extension cords, dry cloths, wheel cleaner, and trim cleaners are all required.

You can perform your services at people’s homes or places of business. Make yourself as accessible and accommodating as possible.

You may start this low-cost business by canvassing friends and family, and if you do a good job, they will spread the news. For as little as £1 per day, you can create social media pages, boost posts, and promote your page – and get all of your friends and family to like, share, and follow your posts as well.

Depending on the job customers want done, automobile valeting firms can charge anything from £10 to £25 per car. Don’t forget to leave some business cards and a cheap air freshener.

Are you thinking of setting up a cheap business?

Simple Formations offers low-cost business formation services if you want to start a Limited company. For as little as £28 we will have you enrolled and ready to trade!

For more information View our company formation packages now >>

Companies House Moving Entirely to Digital

Companies House will only accept filings through their online services by the end of 2018/19. According to Mondaq, those 20% of organisations still filing on paper will need to make the changeover to ‘improve efficiency and minimise expenses.’

However, this will result in higher prices for businesses.

Accounting Software Costs

Companies and accountants will need to learn and use often-expensive accounting software in order to make the changeover. This additional cost can be tough to justify, but there are a few alternatives.

The main accounting contenders in this arena are:

Clear Books Xero QuickBooks Kashflow Freeagent
Each makes filing accounts online quick and easy, but mastery is required to ensure that all accounts are up to date and accurate. Accounting software may also generate invoices, track payments, send late payment notifications, and give other valuable automation capabilities, such as connecting to your online bank and PayPal accounts.

The Benefits of Filing Online

Despite the additional software costs, there are numerous advantages to filing with Companies House online. These advantages might make the filing procedure easier and more secure.

For instance:

Most paperwork are processed within 24 hours.
There are no shipping expenses.
Cover letters are not required.
Automatic confirmations of acceptance
Reduces the possibility of late filing fines.
Checks and reporting built-in for any errors or omissions
However, because 80 percent of companies already file with Enterprises House online, the move will only effect a small percentage of companies.

New company?

So if you are about to form a new company, you will need to ensure you use accounting software or an accounting firm that already uses this online method of filing to ensure you stay ahead of the curve.

Is Nicola Sturgeon destroying the Scottish Economy?

Scotland had a lower rate of new business formations than the rest of the UK in 2016. Last year, fewer new enterprises were established in Scotland, which is concerning for the Scottish economy.

According to an article on The Spectator website, Scotland has been performing substantially worse than the rest of the UK. Scotland barely grew by 0.2 percent last quarter, whereas the UK grew by 0.6 percent.

The Spectator claims that this is due to the fostering of political uncertainty. Scotland may vote for independence in order to stay in Europe if Theresa May implements Article 50 and Britain quits the EU.

What does uncertainty mean for Scotland?

That’s not clear. Scotland, as an independent state, would have to assure robust environments for housing (current growth 3.5 percent compared to 7.2 percent for England) and new business, which they have yet to do.

Scotland’s future is murky at best, with the SNP advocating for a second independence referendum. What is the currency? Which industry? Independent?

As a result of all of this, fewer investments are being made in Scotland, which is today enveloped by an ever-increasing political fog with declining visibility. The caviar is being returned to London by Scotland.

Sturgeon’s “Cast-iron” Mandate

According to STV News, Nicola Sturgeon has warned that a second independence referendum is “probable” following the UK’s exit from the EU. In the Brexit referendum last year, 62 percent of Scottish voters voted Remain.

Sturgeon’s SNP campaigned for re-election on the promise of a mandate to conduct a second independence referendum if the first’s circumstances changed. Following Brexit, the SNP is attempting to carry out their mandate by calling for a second referendum.

However, it looks that the Scots do not want a second referendum, which is increasing the level of uncertainty. Scotland is rapidly dividing itself.


The major political question in Scotland is whether or not a second referendum will be held, and if so, whether it would be successful. However, in order to reverse Scotland’s current economic slowdown, more new company formations will be required, and investment will be a key aspect in the Scots’ future corporate success.

2016: The Record Breaking Year for New Company Formations.

2016: The Record Breaking Year for New Company Formations – up 7.85%

If you are wondering if setting up a company in the UK is a wise decision then think again. There have never been as many new company formations.

The UK is Booming!

There were a record-breaking 664,720 firms registered at Companies House last year. This is an increase of 7.85 percent from 2015, when 612,565 new businesses were formed.

Of these new companies in 2016:

  1. 209,869 formed in London
  2. 35,502 in Scotland
  3. 32,999 in Greater Manchester
  4. 31,162 in West Midlands
  5. 17,837 in West Yorkshire
  6. 17,671 in Hertfordshire

These figures plainly illustrate that the UK economy is thriving as more people start businesses. The pattern tends to suggest that the United Kingdom is a business-friendly island where businesses may and do thrive.

Many Regions Reporting Growth

Since the statistics for new company formations were published, many regions in the UK have reported growth. It comes as a surprise seeing that last year was the year of Brexit, President Donald Trump and great political and economic uncertainty.

Regions seeing new company number growth include:

Despite recent political and economic difficulties, many businesses have sprung and prospered throughout the Midlands. If the current trend continues, many new businesses will be formed.

Into 2017

If the current trend continues into 2017, the number of new businesses that emerge could increase even more. With 711,250 new organisations creating this year, we may see an additional 7% growth; we’ll just have to wait and see.

Appointing Non-UK Residents as Directors

There are no residency limitations for directors of a UK limited business. Many firms are founded with directors who are not UK residents.

The location of the registered office, not the location of the company’s executives, determines whether the firm is a UK company. You are free to appoint as many foreign directors and stockholders as you choose.

While there are no legal barriers to appointing directors from outside the UK, there are a few things to keep in mind.

Will you be able to create a bank account in the United Kingdom? If banks are unable to do credit checks on company directors, they may be unable to open accounts swiftly. For help with business bank accounts, you may need to contact a local bank.

Being a company director does not guarantee you a visa to enter or work in the United Kingdom. For more information, we recommend contacting the UK Visa & Immigration Service.

If you register a company in the UK, you must maintain a UK address for the company at all times

It’s vital to remember that once you’ve registered a company in England and Wales, Scotland, or Northern Ireland, you can only move the address inside that region. For example, a company can be registered in Edinburgh and later relocated to Glasgow, or a company in London can relocate to Liverpool, but not from Belfast (Northern Ireland) to Cardiff (Wales).

The rest of the company registration requirements are the same. The company must be registered with Companies House. You’ll need at least one director and one shareholder to do so. It is possible to occupy both of these positions with the same person, or you can have several directors and stockholders.

A limited corporation can be formed in one of three methods in the United Kingdom:

Using an online corporation formation service
Companies House’s Web Incorporation Service is available online.
Using a paper application from Companies House

The quickest and easiest way to set up a company in the UK is to use the services of an online company formation agent.

Because everything is done online, most applications are approved within a few working hours. There is no need to fly to the United Kingdom, speak to anyone on the phone, mail or sign any paperwork in person.

Due to the ease of incorporation and inexpensive start-up fees, the United Kingdom is a popular venue for overseas firms to incorporate. Simple Formations allows you to register your business online right now.

What is the SIC code?

When you register a new company in the UK you will be asked to select the business activities from a list.

The constitutional documents do not mention each company’s goal or specific business activity because a vast percentage of new corporations choose model articles. As a result, you must supply the most appropriate SIC code for your business.

The SIC code is a five-digit numerical number that stands for Standard Industrial Classification. Each business sector begins with two digits; for example, all codes for enterprises in the “Transportation and Storage” sector begin with two digits between 49 and 53. The business’s scope is then narrowed down by the last three digits. For example, individuals working in “Transport through Pipeline” should use 49500. It’s a huge list, and adding more examples will only result in a long list of numbers. Each number corresponds to a certain commercial activity, and each sector has its own level of organisation. The full list of codes can be seen here.

Each corporation can have one or more codes, which can be modified as needed when filing the Confirmation Statement. If none of the other codes apply to your company or you prefer not to choose a descriptive code, choose 82990 “Other business support services activities not elsewhere classified.”

Many businesses may not start trading right once and may go dormant for years. If you’re only starting a company to protect a name or don’t plan to trade anytime soon, you can use code 99999 “Dormant Company.”

The list evolves and changes in response to various company operations and market changes. 47990 years ago today Retail sale via mail order houses or the internet” was a few words shorter, and there were no codes governing the sale of computer equipment. This explains why no two categories intersect. Just in case, there are a few numbers between each one. It will take a long time for something to be removed from the list, but markets move quickly, so flexibility is essential.

So why have them in the first place if they’re so fluid? The system has been in place for more than 60 years, and it was created to make economic activity and corporate growth easier to track. It also supports information homogeneity to make data analysis easier. For example, if the formation of pharmaceutical enterprises has increased dramatically in the last five years, SIC codes make this easily identifiable and reportable, and they feed into the reports and information we receive about the changing economic landscape.

It’s worth noting that the SIC code isn’t exclusive. It’s just giving the government information. You can update the SIC codes at Companies House on a regular basis if your business model changes. For most firms, simply choose the code that best fits your needs and don’t worry if your company’s direction changes.

5 Reasons for Forming a Limited Company

Someone may opt to form a Limited Company for a variety of reasons. Here are five of them summarised:

Protected liability for owners

The owners are protected if something goes wrong by founding a limited corporation. Unlike a sole trader, who is personally liable for any debts or legal actions brought against the business, the corporation is deemed to be a separate legal entity. As a Director, your liability is limited to the value of your shareholding or guarantee, depending on the type of company you incorporate. This is especially critical in businesses that are prone to health and safety hazards, such as the construction industry.

May be more tax efficient to draw dividends than being a sole trader

Because tax laws in the United Kingdom change frequently, it’s critical to seek guidance on which business structure is appropriate for you. When profits and turnover exceed a particular amount, however, it is often more tax effective to manage a limited company rather than a single trader business.

Recognised business format – professional, reputable and sometimes expected

Although many businesses operate without forming a company for many years without incident or harm to their reputation, it is often believed that having a limited status can improve how potential customers and suppliers perceive you. Some people believe it is more professional than working as a solo trader. You might discover that founding the firm boosts your sales in ways that wouldn’t have happened otherwise.

Furthermore, if you are functioning as a contractor, the majority of potential clients will expect you to operate as a limited business. This is for their protection, as well as to avoid any employment rights that may arise after you have worked for them for a period of time.

Separate entity to the owners. You are dealing with a company not just one person

As previously stated, the company is treated as a separate legal entity. This means that a supplier or client can rest assured that, regardless of staff changes, the company will continue to operate as long as it is profitable.

Structuring and Equity. Different shares can be issued to different shareholders. When raising equity you can sell shares or re-structure offering more flexibility than being a sole trader

When you trade through a limited company, you are not only protected and potentially more trustworthy, but you also have more ownership freedom. A solo trader owns his or her business and hence bears full responsibility as well as profit. When you form a limited company, you have the option of providing dividends, shares, rights, and reorganisation options. A limited company investment is deemed safer for both the investor and the owners because their individual assets are not at danger.

What is Trademark Registration?

Branding and trademarks are inextricably linked to a company’s image. To put it another way, trademark registration is a way to safeguard your brand or idea. If you add the ® sign next to your brand once it has been registered, for example, no one else can use the name of your product or service.

Disney’s Mickey Mouse is a well-known example of successful trademarking, with legal protection that lasts nearly a century, significantly longer than the average trademark life period of ten years. You may need to register a trademark if you have a specific product or brand that you want to protect.

Advice on how to register a trademark

The first step is to determine whether or not your brand is a trademark. Your trademark must be completely distinctive and must not be offensive or deceptive. It is considered deceptive information if you claim to be a “organic” company but your product is not organic.

Other issues are also considered inappropriate, and additional information can be found on the government website.

This link will give you all of the information you’ll need to decide whether or not to register. You should also check to see if your trademark has already been registered, which you may accomplish by using the following search engine:

These searches can be assisted by trademark attorneys. To avoid headaches later on, it is preferable to be meticulous at the start of the procedure.

How long does the process take?

The process should take about 4 months if there are no challenges to your trademark application. However, keep in mind that your registered trademark only has a 10-year life period. Furthermore, if you just register your trade mark in the United Kingdom, your brand is only protected in that country. It is not a global exclusive.

Trademark protection is not immediately provided by registering a company name with Companies House. Companies and trademarks, on the other hand, are frequently registered at the same time.

You can check if your proposed company name is available for registration with Companies House on our website.

Time is Money. Is it Time to Outsource?

A decent product and a strong work ethic are good starting points for a successful business, but there are many other factors of running a business that are critical to its long-term success. Traditionally, bookkeeping, accounting, human resources, and IT functions were handled internally, but the rise of outsourcing has provided an excellent opportunity to free up your time and focus on your abilities.

Your time – or lack thereof – can be better spent focusing on what’s best for your business, while you outsource certain chores to expert organisations or freelance consultants for a small price.

Accounting & Bookkeeping

To keep costs down, you might want to handle your company’s general bookkeeping and accounting. A simple excel spreadsheet or a more comprehensive programme may be all that is required. There is also a plethora of information available on the internet to help you with this.

Outsourcing these chores to a specialised company could be extremely beneficial. Accountancy firms can guarantee that your records are current and that you are meeting all of your legal obligations. A trained eye can spot methods to make your business more tax efficient, saving you money in the long run.

IT and Web Development

An effective website is typically a crucial aspect of a successful firm in the information age. For a small cost, freelance writers can deliver useful articles. SEO professionals can also ensure that your website is visible, gaining new customers.

In recent years, an increasing number of businesses have turned to social media to market their brand. There are numerous companies that can handle your social media appearance.

HR Management

Employment law is complicated. You may need to design employment contracts, manage conflicts, or deal with redundancy issues as your firm grows. If possible, we advocate managing this in-house, but if necessary, you can outsource it to a specialised firm.

Virtual Assistants

Answering phone calls, responding to emails, and dealing with regular administration work may put a strain on small businesses. Many companies can help you with this, and they may even save you money on hiring more people.

In essence, time is money, and the more time you spend on each of these areas, the less time you have to make money.

Choosing a Business Bank Account. The Basics

If you’re looking for a 1950 Chevrolet reproduction headlamp, your selections might be restricted. If you’re looking for a corporate bank account, though, you have a lot of possibilities. Different accounts might benefit you in different ways, and selecting which is best for you raises several questions. Do you require a chequebook? What kind of business will you conduct? Should you use a bank or a building society to save money? This article will answer some of the most common questions and help you make an informed account selection.

The cost of an account

The cost of an account will surely be a major consideration, and fortunately, most banks provide free banking for between 12 and 24 months. This can be beneficial to both new and current businesses; nevertheless, it is critical to be aware of and account for the fees associated with the account after this period.

This ‘honeymoon’ period is designed to entice you to choose a specific bank and try out their services. Any costs associated with the account after this point should, in theory, be offset by the level of service you receive. If you believe the service’s charges are excessive based on your previous experience with the service, you have every right to switch providers.

Please keep in mind that free business banking is usually only available for the first account. If you choose to have multiple accounts, make sure you understand the additional fees.

How do different transaction types affect you?

Most transactions for e-commerce enterprises are likely to be electronic, whereas a local retailer may deal mostly with cash. The sort of account that is best for your organisation depends on the nature of your transactions.

Businesses that deal in cash may discover that having a local branch is critical. If your transactions are mostly conducted online and you frequently give services to international clientele, the foreign currency capabilities accessible to you may be more useful.

Banking Facilities

Your account should allow you to deposit and withdraw funds at a basic level, though there are a variety of banking options available to you. Overdrafts and internet banking are just two examples of products that could be extremely beneficial to your company. Check to see what amenities are available before making a decision.

Switching accounts is always a possibility, and regularly comparing your account to others can guarantee you’re getting the best deal for your business.

Consider the costs and service consequences when dealing with banks, and make the best decision for your firm based on as much information as possible.

Please see our website for more information on the bank referrals we can offer.

How to Extract Money from a Limited Company?

A firm can distribute income to its directors/shareholders in a variety of ways. Many board members debate whether to pay a dividend or a salary. Depending on the individual’s specific circumstances, payments might be made by salary, dividend, costs, or benefits. Hopefully, your limited company is profitable, and you need to pay dividends to the company’s directors and shareholders. There are various options for accomplishing this.
The majority of corporate directors are given a salary plus extra expenditures or benefits. Salaries are usually paid via PAYE, which is reported to HMRC via RTI. You can use one of various software solutions or one of several internet service providers to help you report salary payments.
Benefits and expenses

Other benefits and expenses that are not included in the PAYE compensation may be received by a director. The P11d is used to declare these benefits to HMRC at the end of the year. Some examples are:

Health coverage
Some travel and entertainment expenses incurred by the company
Personal tax returns with Childcare Accounting assistance
Other gifts or supplies from the company that were directly relevant to the job


Directors are frequently shareholders as well. If this is the case, the directors may be paid dividends (as shareholders) from the company’s profits. It’s worth noting that dividends can only be given if the company has made a profit in the current or prior year’s financial statements. It is the responsibility of the board of directors to ensure that the firm can afford to pay a dividend.

The profit is distributed by the board of directors of the company. They decide which share classes will get dividends and how much each share will be worth. The board of directors must hold a meeting to “declare” the dividend and retain minutes of the meeting. This is true even if the company is run by a single shareholder who is also the director.

What documents are required to issue a dividend?

A set of minutes should be kept for recording the decision to pay a dividend. The board of directors should convene a meeting and document the outcome in meeting minutes. Even if there is only one shareholder and one director, meeting minutes should be kept on file for HMRC. Otherwise, HMRC could rule that the payment was a salary rather than a dividend.

Whenever a dividend is paid, the shareholder must receive a voucher that shows:

The date on which the dividend was paid out
The business’s name
The name of the dividend-paying shareholder
The dividend per share that will be paid
The ‘dividend tax credit’ amount is
The shareholders must receive a copy of the dividend voucher, and the firm must keep a copy for its own records.

When the following approaches are combined, they can be extremely tax effective, which is one of the numerous benefits of operating as a limited business.

Being a sole trader does not offer you the same flexibility. If you would like to form a limited company, get started today and check if your company name is available.

Statutory Registers for a Company

Companies in the United Kingdom are required by law to keep correct company records. Every business owner should understand what statutory registers are and how they are used. Many businesses, on the other hand, do not keep their records up to date and may not even have company registers.

Simply put, corporate registers (also known as statutory registers or statutory books) are a set of registers that record information about a firm. According to the Companies Act of 2006, these must be accurate and available for public inspection upon request. When you registered your business, your company formation agent should have given you one.

These registers must be kept in the company’s registered office, or if it is located elsewhere, Companies House must be notified. The following information must be kept in the statutory registers:

Directors and secretaries of corporations
Members/shareholders of the corporation. It must also identify the quantity and class of shares they now possess or have held in the past.
Any charges connected to the company’s property (for example, a mortgage) or floating charges.
This data is often stored in a single bound book or a loose leaf folder. However, some businesses now save them in electronic form.

A register of any Persons with Significant Control has also been added in recent modifications. Essentially, this means that information must be kept on everyone who has-

Over 25% of the nominal value of the shares
Over 25% of eligible voters
A majority of the board of directors can be appointed or removed.
The ability to exert great control over the business
Company directors who fail to keep these statutory registers up to date would be in violation of the Companies Act of 2006. They must also be available for public viewing upon request. The firm and its directors may be held accountable for a fine if the registers are not kept up to date and maintained. A punishment may be imposed if a request to access these papers is not responded to within 5 working days of the request.

Requests for access to corporation records are uncommon. To avoid any problems, you should maintain your registers up to date.

You can purchase company registers online for just a few pounds and keep these at your registered office. These include all the statutory registers and often include additional share certificates.

Changes to the Certificate of Good Standing

The Certificate of Good Standing (COGS) is a formal document issued by Companies House. It is often requested by overseas authorities when commercial matters are being dealt with outside of the UK. The Certificate of Good Standing can certify a number of details. The information you can add to the certificate has changed as of November 2016.

Before ordering a Certificate of Good Standing, be sure you understand what information must be included on the certificate. The individual who requests the document may offer suggestions for the certificate’s content. If they don’t, you should include as much detail as feasible.

Due to changes at Companies House, it is no longer possible to publish the Shareholders Details or any of the Issued Share Capital Details as of November 2016. If you are dealing with overseas authorities that insist you confirm the shareholders names you will need to explain this is not possible on the COGS. A copy of your most recent Confirmation Statement may be required if you need to show who the shareholders of a corporation are (previously called the Annual Return).

Since November 2016, the following information can be added to Certificates of Good Standing: –

Directors’ names and addresses for service
Date of birth of the directors (Only Month and Year will be shown for security purposes)
Secretary of State’s Office Address
Registered Address
The following information can no longer be added to the COGS-

Names of stockholders
Each shareholder’s shareholdings
Details on the issued share capital
On behalf of our customers, we are happy to order certifications from Companies House. We have two service speeds that you can acquire online through our website. We will call you when we receive your order to discuss the information you require on the certificate.

Order here for 7-10 day standard service.

Order 2 Day Expedite Service here.

We can also provide an apostille service for you once the Certificate of Good Standing has been received if the overseas authorities require it. Most apostille orders are completed within a few days. The Certificate of Good Standing will be globally recognised by any country that is a member of the Hague Convention once the apostille has been granted.

How to Dissolve a UK Company that is Not Required?

Companies that are no longer needed can be dissolved and their names taken off the public registry. The procedure for closing a business is straightforward and only involves the completion of one form. If a company’s owners no longer want to keep it, it can be closed through voluntary dissolution.

The Companies Act allows a business to be removed from the register at Companies House through voluntary dissolution. This is most common when a corporation remains dormant. The directors (or a majority of the directors) must fill out a DS01 form and pay a £10 charge to have a business stricken off the register. A firm may not seek for voluntary dissolution if it has engaged in any of the following activities within the previous three months:

It was renamed.
Stocks were sold for money.
Traded or remained in operation
Furthermore, a corporation may not apply for voluntary dissolution if it is undergoing or has been subjected to insolvency procedures. Liquidation, administration, or an arrangement with members or creditors are some examples. If it has paid off all of its business debts in the last three months, it may apply to be struck off.

The directors shall transmit a copy of the form DS01 to the following addresses within 7 days to alert interested parties:

Every member (e.g. shareholders)
If there are any outstanding liabilities, contact HM Revenue and Customs and the Department for Work and Pensions.
All creditors (current/potential)
Employer pension fund managers and trustees (if any)
Any directors who haven’t signed the document
Companies House will record the information once the voluntary dissolution application has been submitted and all necessary parties have been notified. They will then announce the application in the London, Edinburgh, or Belfast gazettes to provide interested parties the option to object to this course of action (as appropriate). An objection or a complaint must be submitted in writing to Companies House, together with proof to support the objection.

For the following reasons, people may object or complain:

If directors fail to notify interested parties (punishable by a £5000 fine or imprisonment if a deliberate attempt to hide the application is discovered),
If the corporation owes money and a legal action is being taken to reclaim the payments,
If fraudulent declarations on form DS01 were made,
If the corporation is involved in any other legal proceedings
If the company has violated the application’s terms (in regards to the 3 month trading period, for example)
If a director has been convicted of tax fraud or another crime,
The company will be struck off the register no later than 3 months following the date of notice in the gazette if there are no objections.

In addition to founding thousands of companies each year, we also help consumers dissolve firms that are no longer needed. We assist with correctly completing the DS01 form, paying Companies House, and monitoring the application until it is dissolved.

Company Shareholders. The Basics

Limited companies in the United Kingdom that are run for profit are often ‘limited by shares’ and have shareholders. Shareholders, subscribers, and members are all phrases that are used to refer to the business’s proprietors.

This post continues our theme of offering an overview of essential facts. We now look at the fundamentals of becoming a shareholder in a UK company, after looking at other topics such as company secretaries and registered office addresses. This data only applied to for-profit limited firms, not to non-profit organisations.

In order for a company limited by shares to be constituted, at least one shareholder must be appointed at the moment of formation and must own at least one share in the company. Because shares can only be purchased in whole numbers, each shareholder must own at least one entire share if there are two, three, or more. No fractional shares can be issued. If you want all shareholders to have the same rights and responsibilities, make sure they all own the same amount of stock. Otherwise, you can allocate shares in a ratio to give one shareholder more ownership or rights while giving another less.

Company The company’s directors are chosen by the shareholders. Smaller UK businesses frequently have only one shareholder, who also serves as the company’s director. This is standard, however some businesses have many shareholders and one or more directors. The distinction between shareholders and directors is important to understand. The corporation is ‘owned’ by its shareholders, while directors make choices for the company’s benefit.

Subscribing Shareholders

‘Subscribers’ are the first shareholders who subscribe (add) their names to the memorandum of association at the moment of incorporation. Those who buy shares after the firm is formed are just referred to as “shareholders” or “members.” Subscribers do not have any more rights, obligations, or claims to the company than shareholders or members have. The term’subscribers’ is merely used to differentiate between the initial shareholders and those who bought shares after the company was formed.

You can appoint and introduce any number of additional shareholders or members during the company’s lifetime. This is subject to any share capital provisions specified in the articles of organisation. The firm can issue as many new shares as it needs, each with its own name, privileges, and value.

Adding or Changing Shareholders

Companies House must be notified of these changes as soon as practicable by filing the appropriate share change papers. You’ll also need to update the company’s records, which are typically kept in the registered office. Once the share modifications are complete, you can send a new Confirmation Statement to Companies House to ensure the Registrar of Companies has the proper shareholder information. This is simple to do online.

It’s relatively simple to add new shareholders with the same shares. Other changes to shares could include the formation of new shares or the cancellation of existing share classes. Every year, we assist hundreds of customers with shareholder documentation, so please do not hesitate to contact us if you require assistance.

Address Your Business Correctly

The registered office address shown at Companies House does not have to be the same as the business’s physical location. Alternative addresses for the public register can be declared by corporations, limited liability partnerships, and limited partnerships. Although a Registered Office is a legal necessity for a limited company in the United Kingdom, it is not necessary for a corporation to establish a physical address. You may operate from a physical trade area, such as a store, warehouse, or office, depending on the type of business. You can also work from home or from a ‘fluid’ location like your automobile, hotel room, or rented business centre. You may or may not want your actual address to be exposed to the public on free websites, depending on your circumstances.

What addresses do I need to form a company?

For a successful company creation, various sorts of addresses are required:

Address of registered office
Address for Director’s Service
Address of Director’s Residence
Address for Secretary’s Service (if appointed)
Address of a Person with Significant Control
Optional: a SAIL address (one alternate inspection location).
Although having a dedicated address that is not your home address or physical location is not required by law, it might be beneficial. Rather of providing a visible residential address, it gives your organisation a professional impression and provides psychological and financial isolation. Rather than providing your home address to clients, suppliers, and other general business connections, you may benefit from adopting a more ‘business-like’ address.

It may also be beneficial to have a separate location for peace of mind, depending on your company and the types of consumers you attract. You may not expect an angry customer to come into your office to discuss a problem, but it does happen. Unwanted visitors to your family home might be avoided by using a service address.

If you want to use your home address as the registered office, make sure there are no restrictions on the property. Some property deeds, for example, indicate that they are not to be utilised for commercial reasons. This restriction may also be included in your lease agreement if you rent a house. Again, a properly presented business address will be beneficial in this situation.

It is crucial to know, however, that you must disclose your physical address to HMRC in order to register for VAT. If your real address is also made available to them, correspondence can still be routed through a service address provider.

We provide a virtual address solution to a wide range of enterprises, from sole traders to registered charities. We are pleased to give you with some privacy, regardless of the nature of your business. Using one of our addresses is an easy way to keep your address hidden from the public eye.

The Facts About Dormant Companies

Many references to dormant corporations can be found when researching company formation online. Agents frequently try to sell dormant businesses as a “special service” or charge extra for things you don’t require. The truth is that registering a dormant corporation is the same as registering any other corporation.

You can begin business as soon as your limited company is constituted and Companies House has advised you of the registration number. However, there is no requirement to do so.

You may have formed the corporation simply to preserve your identity, or you may require it for funding applications. In either case, as long as you do not trade through the corporation, it will remain in its inactive state.

Let me explain one point that is frequently misunderstood: when a company is originally registered, it is dormant. There is no such thing as a “dormant corporation registration.” A new business is dormant until it makes its first purchase or sale of goods or services.

A business is deemed active when:

It engages in any type of commercial or professional activity.
Goods are purchased or sold with the intention of profit or surplus.
It’s a service provider.
Any earnings are received.
Interest must be paid.
It deals with investments.
Personnel are employed.
All new business formations in the UK are automatically reported to HMRC by Companies House. It is your responsibility to notify HMRC as soon as possible if you do not intend to deal with your new business right away, or at all. HMRC will send you form CT41G after your company is registered, with an additional insert for dormant companies. The simplest way to notify HMRC that your company is dormant is to complete the insert.

The Companies House register will be updated and the status will change from ‘Active’ to ‘Dormant’ after the dormant notification has been processed. The name of a dormant corporation is not eligible for registration and is thus protected.

Until you meet one or more of the aforementioned criteria, the company will remain dormant. However, it is still your responsibility to notify HMRC of the change. You must complete this within three months of becoming active. HMRC will contact you to remind you to pay corporation tax and file a company tax return after the register is modified back to active.

Even if your business is dormant for the duration of its existence, you must file dormant company accounts and the confirmation statement. The company’s finances will be dormant, with no activity, and the company’s only asset should be the initial stock. Many corporations only have to pay £1, but check your incorporation documentation. Once a year, the confirmation statement is a snapshot of the corporation. Any changes in officers, addresses, shareholdings, or persons with significant control are shown here. Except for the occasional address change, this is unlikely to change much in the case of a defunct corporation.

The company director is responsible for submitting the accounts and the confirmation statement (s). However, the directors can outsource this to an agent, such as Simple Formations, who can handle it on a yearly basis.

For assistance registering a dormant company, or advice on filing your dormant accounts and other company forms, do not hesitate to contact us.

Sole Traders Know Your Responsibilities

If you want to work as a single trader, you must register with HMRC as a self-employed person. This is a very quick and simple process that does not require Companies House involvement.

You must register for Self-Assessment as a sole trader since you will be running a business as a self-employed individual. You will be responsible for paying HMRC Income Tax and National Insurance Contributions (NICs). Every year, you must also prepare and file a Self-Assessment tax return.

The main difference between working as a sole trader and as part of a limited company is that there is no legal separation between you and your business in terms of finances and liabilities. As a result, you can keep all business profits after tax, but your assets are at risk if you get into unmanageable debt. You will be completely responsible.

The phrase sole trader simply indicates that the business is run by one person, yet that person can employ others without having to form a separate corporate entity. You will need to register for PAYE if you wish to hire someone. This is simple to do online. There are many companies that will administer your payroll for you for a little monthly fee, or you may do it yourself. Online accounting software allows you to maintain your financial information up to date and create your end-of-year accounts at a cheap cost.

Self-assessment rules and deadlines are detailed on, but the following information provides an overview.

After the first tax year, you must register as a self-employed person by the end of October. For instance, suppose you began trading on May 7, 2016. The first tax year will finish on May 4, 2017. As a result, you must register as self-employed by October 31, 2017.

Using the example above, your first self-assessment return must be filed by January 31, 2018. The date by which you must pay the first bill will then be sent to you.

Following that, you will have two filing dates for submissions and payments each year.

HMRC now provides complete online filing services. It is strongly suggested that you do so as soon as possible. Don’t put it off until January; late reporting penalties can soon eat into your profit margins.

There is no official registration for single traders, and there is no way to know for sure that your company name is unique. However, always run a quick check on Companies House. If your selected trading name is the same as that of an existing limited business, you risk being sued. If the name you want to use is already used, you can register it as a corporation to prevent others from using it. This can be left idle until you want to trade with it again, or you may simply want to safeguard the name. You can register a new business in as little as a few hours if you use an agent like Simple Formations.

Northern Ireland Company Formation Service

The process of founding a Northern Ireland corporation is quite similar to that of forming a company in England, Wales, or Scotland. It is now easier to register a limited company in Northern Ireland thanks to the implementation of the Companies Act 2006. Companies House in Cardiff now oversees them, and the process may now be completed online in a matter of hours (Northern Ireland company registration usually 6-8 working hours subject to Companies House).

For as little as £28.00, you can order your company online at SFS. You’ll need an appropriate Northern Irish address to serve as the company’s registered office address. You can place an order here.

Online Northern Ireland Company Formation – £28.00

This bundle includes all of the legal documents in electronic format and is only available online. Create your own company online using your own information.

Standard Northern Ireland Company Formation – £38.00

Our most popular plan includes first-class mail delivery of printed documents. Your personal director and secretary information is used to form companies. This bundle contains all of the legally essential documentation delivered to your door in your company’s name. If you’re new to company formation, this option is ideal.

Executive Northern Ireland Company formation – £58.00

This package contains all of the features of our basic package plus a Company Seal and Aadhesive Wafers at a reduced price of over £10.00 off our individual costs.

What you get:

From the beginning, the company was registered with all of your personal information, so there was no need to fill out any forms.
Share capital according to your needs.
Memorandum and Articles of Association Certificate of Incorporation Register of Members, Directors, and Secretaries, Directors Interests, and Company Charges
First minutes of the Board of Directors
Access to Businesses Free business bank account House efiling (subject to status)

Flat Management Companies

Although SFS does not create Flat Management Companies, we are delighted to share the following information.

How does a Flat Management company work?

A limited business is treated as a ‘person’ in the eyes of the law. It can own property (such as a freehold or leasehold) and sign contracts in its own name. It exists separately and independently of the people involved.

Why have a Flat Management Company?

Flat management firms are businesses that manage all or parts of a site or building on behalf of their owners. Flat Management businesses are commonly utilised to protect the leaseholders’ interests when there are several tenants.

There are usually a variety of common places in shared properties that are shared by all flat/unit tenants. Communal halls, access areas, and gardens, for example. You can set up a method for collecting pooled cash to maintain and repair any shared areas if you have a Flat Management Company.

A Flat Management Corporation may not be necessary if the company does not own the freehold for the entire property. A citizens’ association might be a better option.

The constitution of a Flat Management Company

The Memorandum and Articles of Association of a Flat Management Company are expressly drafted to allow the company to own, manage, and administer the property, which is typically divided into several residences, units, or flats. When a property is divided into several flats, each flat owner has their own lease, but they may also possess shares in a management company that holds the freehold (or lease) of the entire building.

Transfer of Shares – change of ownership

The flat owners have a voice in the management of the limited company because they are shareholders. In most cases, shareholders who sell their apartments must also transfer their shares to the new owners, according to the company’s bylaws. Thus, the limited business always has the best interests of all current flat owners at heart. Regardless of who owns the company’s stock at any one time, it will always be treated as a separate legal entity.

Directors Service Address. The Basics

Company directors in the United Kingdom are required to give Companies House with two addresses: one for “service” and one for “residence.”

The minimum number of directors required for a limited company in the United Kingdom is one. Directors were previously required to disclose their home address publicly before the Companies Act 2006 came into effect. However, the Companies Act has been amended to protect the personal information of directors. This permits directors to have a separate communication address, known as a Director’s Service Address, that they can use to receive correspondence (DSA).

What addresses are recorded at Companies House?

When creating a new business, you must supply two addresses for each of the firm’s directors.

Home Address

This has to be the home address of the director. Only some government entities, credit-checking agencies, and the police have access to it. You may have trouble opening a business bank account if you don’t offer an exact home address.

Service Address

This is the address that the general public has access to both online and in official records for the company. A separate service address is recommended for directors who do not want their home address to appear on the online public register.

In order to have a DSA, the Director must have authority to use a certain address. A company’s registered office is often used for this purpose, especially when a service provider is involved.

Company formation agents like Simple Formations provide address services to many company directors. Delivered to the professional mailing address listed with Companies House as their service address, they receive all of their statutory correspondence there. A new mailing address can then be provided by the recipient. This is an excellent method to preserve personal privacy while maintaining a professional appearance.

The DSA is required as an official correspondence address by all limited company directors, as opposed to a Registered Office. Deliveries from Companies House and HMRC are made to their service location. It doesn’t matter where you find it. On the other hand, a Limited Liability Company’s or Limited Liability Partnership’s Registered Office is their official address (LLP). The registered offices of a corporation or limited liability partnership (LLP) will receive all statutory mail and legal notices directed to them. The location of a company’s or LLP’s registered office must be within the United Kingdom.

Can you use your home address as the service address?

Directors can use their home address as a service address, although many choose to keep their home addresses private to protect their privacy. There are no legal constraints on this practise. Unwanted mail and visitors to your home can be avoided with this method.

Using a business address or a mail service as the service address will keep your residential address confidential.

FREE Directors Service Address

Simple Formations can provide you with a registered office, which you can use as both your company’s headquarters and your designated settlement agent (DSA). Select one of our low-cost registered office services and use it as the address for your company’s board of directors.

Filing Documents for Limited Companies. The Basics

Companies House and HMRC will start sending you official correspondence soon after you register your Limited Company, most of it informing you of the filing requirements these two government institutions need of you.

Statutory paperwork must be completed and submitted by directors of a limited company or the secretary, if one is appointed. It also includes submitting the following paperwork to the appropriate authorities:

Companies House require

Verify and check the annual financial statements of the company.

HMRC require

yearly financial statements
CT600 Corporation Tax Return Payment of any tax owed by a business
Your local Corporation Tax Office might be notified that your business has ceased operations if it is dormant. Your tax reference letter from HMRC will typically come with a dormant company form. Your firm should be exempt from paying Corporation Tax until it is active. However, you should keep in mind that Companies House will still need you to file inactive accounts and an annual return.

When your company is registered, Companies House will supply you with an ARD (Accounting Reference Date). You should prepare your yearly accounts on this date, which marks the end of your fiscal year. For example, if you register a corporation on March 12th, your ARD will be March 31st the following year and every year after that..

Within nine months of the ARD, you must submit yearly financial statements to Companies House. Please read the relevant [blog] for further details on what these should cover, as well as who is excluded from delivering full accounts.

Every year, within 14 days of the company’s incorporation anniversary, a check and confirm statement must be filed with Companies House. Information such as the registered office address, director and secretary contact information, and stock ownership information are all included in the check-and-confirm statement.

In addition to updating shareholder information, you must notify Companies House of any other changes to your company information at any time during the year.

For Corporation Tax reasons, you must register your company as ‘active’ within three months of initiating any form of business activities. Corporation tax accounting periods will be provided to you by HMRC after this. Typically, this begins on the date your firm begins trading and ends on the date your company’s accounting reference date (ARD). After the end of your accounting period, you must pay Corporation Tax within 9 months and 1 day after that date. Within 12 months of the end of the accounting period, you must submit your company’s tax return. Even if your business qualifies as “small,” you must present a complete set of annual financial statements with each tax return.

The company director is always responsible for submitting paperwork to Companies House and HMRC. There is no excuse for not having accurate and timely records even if you hire an accountant or other service provider.