A business owner's guide to HMRC

Companies House registers your company. HMRC taxes it. Many new owners mix the two up. This guide explains what HMRC does and what you need to do as a business owner.

Companies House vs HMRC

• Companies House keeps the public register of companies: names, directors, addresses, accounts and confirmation statements.
• HMRC collects taxes: Corporation Tax, VAT, PAYE and National Insurance, Self Assessment and customs duties.

You file accounts with both, but they are different organisations with different deadlines.

Taxes a limited company deals with

Corporation Tax

Companies pay Corporation Tax on their profits. The rates are:

• 19% (small profits rate) for profits of £50,000 or less.
• 25% (main rate) for profits over £250,000.
• Profits in between pay the main rate reduced by marginal relief.

These limits are reduced for short accounting periods and for companies with associated companies.

Key steps and deadlines:

• Register within 3 months of starting to trade.
• Pay usually 9 months and 1 day after the end of your accounting period.
• File your Company Tax Return (CT600) within 12 months of the end of the accounting period.

VAT

You must register for VAT if your VAT-taxable turnover goes over £90,000 in any rolling 12-month period, or if you expect it to go over that in the next 30 days alone. You can also register voluntarily. Once registered, you charge VAT, reclaim VAT on business costs and file VAT returns using Making Tax Digital compatible software.

PAYE and National Insurance

If your company pays employees, including directors in many cases, you register as an employer. You then run payroll, deduct income tax and National Insurance and report each payment to HMRC through Real Time Information (RTI).

Taxes for you personally

Self Assessment

Directors often need to file a Self Assessment tax return, for example if they receive dividends above the £500 dividend allowance or have other untaxed income. Key dates:

• Register by 5 October after the end of the tax year in which you first need to file.
• File online and pay by 31 January after the end of the tax year.

From April 2026, Making Tax Digital for Income Tax applies to many sole traders and landlords with qualifying income over £50,000, and from April 2027 to those over £30,000. It does not apply to limited companies.

Your HMRC accounts

• Business tax account - manage Corporation Tax, VAT and PAYE in one place, using Government Gateway.
• Personal tax account - see your own tax code, Self Assessment and National Insurance record.
• Unique Taxpayer Reference (UTR) - a 10-digit reference. Your company gets one after incorporation, and you get a separate one for Self Assessment.

Avoiding penalties

HMRC charges penalties and interest for late registration, late filing and late payment. To avoid them:

1. Diary every deadline.
2. Keep records of all income and expenses, normally for at least 6 years for companies.
3. Set money aside for tax as you earn.
4. Open and respond to HMRC letters promptly.
5. Contact HMRC early if you cannot pay. A payment plan may be possible.

Beware of scams

Fraudsters often pretend to be HMRC by email, text or phone. HMRC will not ask for bank details or threaten arrest by text. If in doubt, contact HMRC directly using details on GOV.UK.

How Form My Company can help

Every package registers your new company for Corporation Tax, so you start on the right footing with HMRC. The Fully Inclusive Package adds VAT and PAYE registration. After formation, we can prepare your Annual Accounts and your Self Assessment return. Tax depends on your circumstances, so we always recommend speaking to an accountant about your own position.

Frequently asked questions