HMRC (Her Majesty’s Revenue and Customs office – the UK taxing authority) is aware of all new company formations, so you do not need to inform them. Shortly (usually 14 days) after your company has been registered, HMRC will send your UTR (Unique Tax Payer Reference) number to your company’s registered office address and give you the details of the tax office dealing with your tax matters. If you are using our registered office service, the form will be uploaded to your ShareFile account unless you have the post forwarding service, in which case we will send it to your home address. If you have appointed an agent (usually an accountant) to act on your behalf, simply pass these details in the form to your agent and they will process your online registration. To appoint an agent, you must complete a form 64-8, which the agent then submits to HMRC.
IF YOU HAVE NOT APPOINTED AN AGENT, YOU SHOULD
- register for HMRC online services by going to online.hmrc.gov.uk
- enrol for the Corporation Tax online service,
- activate the Corporation Tax online service
It takes 7 to 14 days to get your online account activated because HMRC will generate and post a gateway number for you to access your online services. This will be sent to your registered office address.
ONCE YOU CAN ACCESS YOUR ACCOUNT ON THE GOVERNMENT GATEWAY, YOU SHOULD COMPLETE THE INFORMATION REQUIRED BY HMRC
- The date you started or intend to start trading
- Your place of business, i.e. the place from where you supply your goods or services. Very often this is not your registered office address. If you want to keep your place of business confidential, don’t worry because HMRC will not publish your address.
- The nature of your business
- The date by which you intend to prepare your accounts. When you form a company, you are automatically given an ARD (Accounting Reference Date). However, you can apply to change it.
You must register for Corporation Tax within 3 months of the date you start trading. If you intend to keep your company dormant for a while, you should notify HMRC of the fact as soon as you can. A company that is dormant does not need to pay Corporation Tax or file Corporation Tax returns.
However, if you are dormant and receive a notice to file a company tax return from HMRC, you will have to file a return to show that you are dormant. If you are not going to start trading for some time or you do not know when you will be ready to start trading, you can save yourself extra work by informing HMRC that you are dormant as soon as your company is formed.
As soon as your company is registered, it has the legal capacity to enter into contracts, employ people, incur expenses and make sales. Your company does not have to wait until it has a bank account to start trading because it can take time to open an account. However, it is rarely the case that start-ups begin trading as soon as a company is set up. Many start-ups take time to start trading while they are developing their websites, business plans and sorting out their finances, so they can be dormant for many months or years even.
COMPANIES ARE OFTEN FORMED WITH THE INTENTION OF KEEPING THEM DORMANT. THIS MAY BE FOR A NUMBER OF REASONS
- To protect a name. Companies House will not allow 2 companies with the same name on their company register. This effectively prevents another company from using the same name although unincorporated businesses can copy the name.
- To hold an asset, copyright or intellectual property
- In readiness to start trading at a later date
A company is considered to be trading if it engages in business activities such as the following
- Buying or selling goods
- Managing investments
- Employing and paying staff
- Earning interest or dividends
- Paying interest or dividends
- Incurring overheads
- Incurring marketing expenses
- Incurring research and development charges
- Incurring professional and financial expenses
If your company changes its status from dormant to trading, you should advise HMRC within 3 months of the date the change happens.
Corporation Tax due date: Corporation tax is payable 9 months and 1 day after the end of the corporation tax accounting period.
Please note: This article should not be relied upon when making any decisions or taking any action of any kind. Please consult professional advisers before making any decision based on the contents of this blog.