Once your UK limited company is incorporated, start by separating its money, confirming its tax position and setting up reliable records. These early decisions determine how you get paid, meet filing deadlines and fund everyday trading. Work through the following steps before transactions become difficult to untangle.
Open a business bank account and record your funding
Open an account in the company’s name and use it for business receipts and payments. Keep the incorporation certificate, company number, identification and ownership details ready for the bank’s checks. Compare ongoing charges, payment facilities and accounting integrations against how you expect to trade.
Record money you introduce correctly. A payment for shares belongs in share capital; money you lend the company should be recorded through your director’s loan account. Neither is sales income. Document the amount and purpose of each transfer so repayments and ownership records remain clear.
Confirm your Corporation Tax registration
Check whether Corporation Tax was set up during incorporation. If necessary, add the service to the company’s business tax account using its Unique Taxpayer Reference, known as a UTR.
Register the company for Corporation Tax within three months of becoming active for tax purposes. This can happen when the company starts trading or receives income such as bank interest, so the incorporation date and tax start date may differ. Do not wait until the first profitable month.
Check that the company’s tax registration records show the correct business start date and accounting details. Make sure someone monitors correspondence sent to the registered office, especially activation codes and notices requiring a Company Tax Return.
Set up bookkeeping before spending increases
Choose accounting software and a consistent process for recording sales, purchases, expenses, assets and amounts owed. Save invoices and receipts as transactions happen, then reconcile the records with the bank account at least monthly.
Keep a separate schedule of costs incurred before trading, including items you paid for personally. Ask your accountant which costs the company can reimburse and which qualify for tax relief; formation fees, equipment and routine expenses can need different treatment.
Accounting records normally need to be retained for six years from the end of the last company financial year they relate to, sometimes longer. Interface Accountants’ bookkeeping services provide document processing and ongoing support to help maintain accurate records.
Assess VAT registration and its effect on pricing
For a UK-established business, compulsory VAT registration generally applies when taxable turnover exceeds £90,000 over a rolling 12-month period, or you expect it to exceed £90,000 in the next 30 days alone. The threshold concerns taxable sales, including zero-rated sales, rather than profit.
Check turnover monthly. If you cross the rolling threshold, apply within 30 days of that month’s end. The forward-looking test has different timing: apply by the end of that 30-day period, with registration effective from when you realised the threshold would be exceeded.
Below the threshold, weigh voluntary registration against recoverable purchase VAT, administration and the effect on customer prices. Plan your digital records and return process early; Interface Accountants offers VAT return services for ongoing reporting.Arrange payroll and decide how to pay yourself
Before paying salaries, check whether you need PAYE registration and complete it before the first payday where required. This can apply even when you are the only director. Payroll reports normally need to be submitted on or before payday.
Budget for employer National Insurance and assess workplace pension duties when hiring. Interface Accountants’ payroll services include payslips and payroll reporting.
For shareholder directors, agree a salary and dividend approach based on company profits and personal circumstances. Dividends require sufficient distributable profits after allowing for tax, together with the appropriate approval, minutes and vouchers. A healthy bank balance alone does not justify a dividend. Unexplained personal withdrawals can create a director’s loan with additional tax consequences.
Build a cash flow forecast and a tax reserve
Prepare a rolling 13-week cash flow forecast showing when customers should pay and when bills fall due. Include stock, subscriptions, wages, loan repayments, insurance and tax payments. Test what happens if a major customer pays a month late.
Use this forecast to establish how much starting capital the company needs. If borrowing is necessary, compare total repayment costs and understand any personal guarantee before signing.
Move money into a separate company savings account for expected taxes. Estimate Corporation Tax from taxable profit, updating the figure as results change. Reserve for VAT and payroll liabilities separately where relevant. Avoid assuming that everything left in the current account is available to spend.
Create a calendar for accounts and tax deadlines
Confirm the company’s accounting reference date and record its actual deadlines. For a typical private limited company, the main timings are:
- First Companies House accounts: normally 21 months after incorporation.
- Later annual accounts: normally nine months after the financial year ends.
- Corporation Tax payment: usually nine months and one day after the tax period ends.
- Company Tax Return: 12 months after the tax accounting period ends.
Your first accounts may cover more than 12 months, while a Corporation Tax accounting period cannot. This can mean two tax returns and two payment deadlines.
Also schedule the confirmation statement, due within 14 days after the review period ends, and any VAT or payroll deadlines. Assign responsibility for preparing, approving and submitting each item.
Establish invoicing and payment controls
Create an invoice template with your full registered company name, contact details, unique invoice number, customer details, supply and invoice dates, a clear description, charges and total due. Add the required VAT details when applicable.
Agree payment terms before starting work. Consider deposits or staged payments for larger projects and check overdue invoices weekly. Decide who can authorise spending, and verify changed supplier bank details through a known contact before transferring money.
Frequently asked questions
Must I appoint an accountant immediately?
No. You can manage the accounts yourself, but directors remain responsible for accurate records and filings. Early professional help is useful when deciding how to fund the company or pay yourself.
Can the company remain dormant after incorporation?
Yes, if it meets the relevant dormancy conditions. The definitions of dormancy differ for Corporation Tax and Companies House reporting. Annual accounts and confirmation statements are still required, even when the company has no trading income.
Is the company number the same as its UTR?
No. Companies House issues the company registration number. A separate UTR is issued for the company’s tax administration. The company’s UTR is also separate from any personal UTR you already hold.
Does every director need Self Assessment?
No. Directorship alone does not automatically require a personal tax return. Your income and circumstances determine the obligation, and you must respond if you receive a notice to file.
Does a trading loss remove the tax return requirement?
No. If the company receives a notice to file a Company Tax Return, it must submit the return even when it makes a loss or has no Corporation Tax to pay.