Running a limited company

A limited company is a separate legal person. That separation is what protects you — and it’s also why the paperwork is stricter than for a sole trader. Here’s what running one actually involves.

Your annual obligations

Every year, a limited company must:

• File annual accounts at Companies House, within 9 months of your accounting year end.
• File a company tax return (CT600) with HMRC, within 12 months of the year end.
• Pay corporation tax within 9 months and 1 day of the year end — note that payment is due before the return.
• File a confirmation statement at Companies House at least once a year, confirming who owns and runs the company.

Miss the accounts deadline and Companies House penalties start automatically and escalate. Late corporation tax attracts interest; late returns attract penalties on top.

Directors’ responsibilities

As a director you are legally responsible for the company’s filings, even if an accountant prepares them. You must act in the company’s interests, keep proper accounting records, and avoid taking money out of the company informally — which brings us to the practical bit.

Taking money out

There are only a few clean routes: salary through payroll, dividends paid out of accumulated profits (with paperwork to match), pension contributions, and repayment of money you’ve lent the company. Anything else tends to become a director’s loan, which carries its own tax charges if not repaid promptly. The right salary-and-dividend mix changes as tax rates change — from April 2026 dividend tax rates rose, so it’s worth revisiting rather than repeating last year’s plan.

Records worth keeping

Invoices in and out, bank statements, VAT records if registered, payroll records, and minutes or written resolutions for dividends. Keep them digital — we run every client on Xero, so records are captured once and reused for everything from VAT returns to year-end accounts.

How we help

We handle the whole compliance calendar — accounts, CT600, confirmation statement, payroll, dividends paperwork — on one fixed annual fee, and tell you the tax to set aside months before it’s due.