How to keep your company compliant without stress

Keeping your company compliant can be challenging and time-consuming, particularly if you’re a first-time company owner or running your business single-handedly. You have many obligations, from filing confirmation statements and annual accounts to preparing tax returns and maintaining accurate records.

1st Formations, the UK’s leading company formation agent provides an overview of 6 key compliance requirements for limited companies. It is also worthwhile seeking help from an accountant and a professional company secretary to minimise stress and avoid penalties.

1. Confirmation statement

Every company must file a confirmation statement with Companies House at least once every 12 months. This annual statutory requirement confirms that the key information held at Companies House is up to date, including:

• The company’s name, registered office address, and registered email address
• Details of directors and the company secretary
• Details of shareholders and issued shares
• People with significant control (PSCs)
• Standard Industrial Classification (SIC) codes

Companies must check that their details are up to date before filing a confirmation statement. Any changes relating to shareholders, shares, and SIC codes can be reported on the confirmation statement itself. However, changes to any other details must be reported on separate forms before or at the same time as filing the statement.

The due date is usually 12 months after incorporation or the confirmation date of the previous statement. Companies have 14 days from the due date to file the statement at Companies House.

While there are no automatic penalties for late filing, failure to submit a statement is a criminal offence that can lead to substantial fines, prosecution, company strike-off, and director disqualification. 

2. Annual accounts 

All companies, whether trading or dormant, are legally required to prepare annual accounts for Companies House. These financial statements provide information on a company’s activities and performance over a set period (usually 12 months). 

The first accounts for Companies House are due 21 months after incorporation. The filing deadline for subsequent accounts is 9 months after the company’s accounting reference date (ARD). The ARD is the last day of the company’s financial year – its financial ‘year end’. 

Failing to deliver accounts on time can result in financial penalties, prosecution, company strike-off, and director disqualification. Companies House imposes an automatic late filing penalty of £150 for accounts submitted after the deadline. Additional penalties apply if the accounts are late by 3, 6, and 12 months. These penalties will double if accounts are late 2 years in a row.

Companies that are ‘active’ for Corporation Tax must also include accounts in their Company Tax Return for HMRC (see below). 

3. Company Tax Return

Most companies are required to submit a Company Tax Return to HMRC every year, except dormant companies that have never traded. You must prepare one for your company if you receive a ‘notice to deliver a Company Tax Return’ from HMRC.

A Company Tax Return is a set of documents that report certain information to HMRC, including income and expenses, profit or loss, and Corporation Tax liability. It comprises form CT600, full annual accounts, and tax computations. 

The filing deadline is 12 months after the end of your company’s accounting period for Corporation Tax. This accounting period is typically 12 months, usually corresponding with the financial year covered in the annual accounts. 

HMRC imposes financial penalties for late Company Tax Returns, starting with an automatic flat-rate fine of £100 and increasing to £1,000 plus up to 20% of any outstanding Corporation Tax.

4. VAT and PAYE

Some companies are required to register with HMRC for VAT and/or Pay As You Earn (PAYE). 

You must register for VAT if your company’s annual taxable turnover for the past 12 months exceeds £90,000 – or you expect it to exceed that amount in the next 30 days. Voluntary VAT registration is optional when taxable turnover is below £90,000. 

If your company is VAT registered, you are legally required to:

• Charge the correct amount of VAT on all taxable goods and services you provide
• Display your 9-digit VAT registration number on all invoices you raise
• Keep accurate VAT records 
• Account for VAT on any imported goods 
• Send a VAT Return to HMRC after each VAT accounting period (usually every 3 months)
• Pay any VAT you owe to HMRC

If your company employs anyone (including yourself as a director), you may need to register as an employer and operate PAYE as part of your payroll. You’ll have additional responsibilities, including keeping employee information, recording their pay and any deductions (e.g. Income Tax), and sending PAYE reports and deductions to HMRC. 

As an employer, you must also pay employees at least the National Minimum Wage for their age, enrol eligible staff in a workplace pension scheme, and get employers’ liability insurance. 

5. Record keeping 

Accurate record-keeping is an essential part of company compliance. This involves maintaining statutory registers and keeping accounting and financial records. 

Statutory company registers contain key information about the company and the people who control it. Currently, the registers you must keep include the following:

• Register of directors 
• Register of directors’ usual residential addresses
• Register of secretaries
• Register of members (i.e. shareholders) 
• Register of people with significant control (PSC register)

However, new measures in the Economic Crime and Corporate Transparency Act 2023 will abolish the requirement for companies to maintain any statutory register other than the register of members. When the change takes effect (date to be confirmed), companies will keep this information centrally at Companies House instead. 

When running a company, you also need to keep the following accounting and financial records:

• Income and expenses, including receipts, invoices, contracts, and bank statements 
• Assets and liabilities 
• Details of stock and stocktakings 
• Goods bought and sold

You must keep all such records for at least 6 years from the end of the financial year to which they relate. In some situations, you may need to keep them for longer.

6. Reporting changes 

It’s not uncommon for changes to occur in a company. To remain compliant, you must tell Companies House if there are any changes to the following:

• Company name 
• Registered office address or registered email address
• Details of directors, the company secretary, or PSCs 
• Accounting reference date
• Shareholders or the company’s share structure
• What the company does (i.e. its SIC codes) 
• The location of your company registers 
• Details of any mortgages

Some of these changes can be updated in the annual confirmation statement, but others must be reported to Companies House on separate forms and within a specific timeframe. 

You’ll also need to tell HMRC if you change your company’s contact details or appoint an accountant or tax advisor. 

How to stay compliant 

To keep your company compliant without stress, consider hiring an accountant or tax advisor and outsourcing certain tasks to a professional company secretary. 

1st Formations provides a company secretarial service to help directors meet their legal obligations, including filing confirmation statements, maintaining statutory registers, and reporting changes to Companies House.