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There are many things to remember when you form a limited company and during the course of trading as a business. One of the most important ones concerns tax and top of the list of taxes to be paid is corporation tax. But what is it, when is it due and how to do you know how much you will need to pay?

Who pays corporation tax?

When you register a limited company, you will be due to pay corporation tax. Any foreign company that has a branch or office within the UK will also be required to pay this, as will any club, cooperative or unincorporated association such as a sports club or community group. The thing to remember about corporation tax is that you don’t get a bill for it – the responsibility is on the director to work out, report and pay this tax.When you start as a limited company, the business is also registered for corporation tax. Within a few weeks of doing this, a letter will be sent to the business’s registered address that contains a form called CT41G. If this hasn’t appeared within three months from the formation of the company, you need to contact HMRC or use their website to note this. Once you have complete this form, you are considered ‘active’ for the payment of corporation tax.The only way to avoid paying corporation tax is if your company is registered as ‘dormant’ with HMRC. This means you have formed the company but have not started trading yet and therefore there are no profits to be taken into account. As a result, you will not yet be liable to pay corporation tax.

Preparing for payment

In order to know how much you will need to pay, you are required to keep accounting records and to prepare a Company Tax Return. This will include information about the profit and loss for corporation tax and will often be completed by an accountant, though you can also complete the process yourself. Paperwork will also need to be registered with Companies House at the same time. If you are looking for professional accounting, take a look at our Business Accounting service for an affordable way to keep on top of your accounts.The deadline for these returns is 12 months after the end of the accounting period that it covers. So, for the year April 2016-17, you would need to submit the return by no later than April 2018. If you go over this period, you will face a financial penalty.

The payment

The current rate of corporation tax is 20%, though there are some changes to this for companies involved in oil rights or extractions. You are required to make this payment within nine months of the end of the accounting period to avoid receiving penalties.You will have to pay corporation tax on money the company makes from doing business (trading profits) as well as investments and selling assets for more than they cost, known as chargeable gains. Tax is also paid on profits from outside the UK if the company is based within the UK. If it is based elsewhere, then the payment is only made on the tax made within the UK.

Getting advice

Tax is a complicated area and there can be financial penalties as a minimum if things aren’t done correctly. Therefore, if you are in any doubt about the amount of tax or information required for corporation tax, you should always seek expert advice as quickly as possible. If you cannot make the required payment, contact HMRC at the earliest point to discuss the matter and try to avoid hefty fines being applied to your account.

When you register your business, you give a trading address and a registered office address to HMRC and Companies House. The latter is the official one used on documentation such as the public register with Companies House and is where statutory mail is sent. The trading address is where the business is based – but what if you don’t have a business premises? This is where Capital Office’s trading address service comes in.

Why use a trading address service?

One of the most common reasons that businesses use a trading address service is that they don’t have a dedicated business premises. You may be a sole trader who works from home or travels a lot for business, so has no need of a permanent shop, office or industrial unit. Or you may run an online business that needs no warehouse storage or office. You may offer freelance services through the internet to various business clients etc.These all mean you may work independently from home or on the move via WIFI hotspots. However, your private home address is not a business address and you may not want someone coming to call at your home in relation to your business.Other businesses may find that they don’t want their location divulged for security reasons and may use the service to protect their business location. This is often the case if you don’t have a physical shop for customers to visit and instead dispatch or post items to customers at their own address.

How the service works

Our trading address service works in a very simple manner once it is set up and can be in force in as little as two hours.Our comprehensive service gives you a Central London EC1 address to use as your business address, adding great prestige to the appearance of your business on your documentation and on your website. Our professional trading address service runs from professional offices in the heart of London, and can accept 'Signed For' parcels and even meet clients on your behalf who choose to visit the location.However, the most important part of the service is the mail forwarding aspect. When you set up your London based trading address as your business address, much of your business mail will come here. Our service is discreet and efficient and allows you to use the address in the centre of London without customers being aware that this isn’t your actual base of operation.Post arrives at our office in your business name and your can either collect it in person, or we can scan it for you and email you the contents. We can also forward your mail to you – there is an unlimited volume of mail and parcels built into the service.We can forward your mail to anywhere in the world and can also hold parcels for you to collect in person. The service includes same day scan and post dispatch at cheaper postal rates than Royal Mail.

Service at a glance

We offer three different packages to suit your needs – 3 month, 6 month and 12 month. All include the following benefits:

• Use of the EC1 address on all business stationary
• Unlimited mail
• Option to forward, collect or have the mail scanned and emailed to you
• Collection frequencies either same day, weekly or monthly
• No fees to set up
• No hidden costs

In addition to the cost benefits of taking the longer package, the 12-month package also gives you free use of one of our professional meeting rooms for up to two hours so if you want to meet potential clients or business partners in the capital, you can use our smart, unbranded and fully air-conditioned facilities. Our meeting rooms come complete with full rapid speed fibre optic Wi-Fi and cabled Internet solutions.You can sign up for the service online and the form takes around 5 minutes to complete. Once payment is processed, you can begin to use our address and we will start handling your mail as you stipulate. We use the latest in mail handling technology alongside friendly and experienced staff to offer the best of modern and traditional trading address services.

When you are starting a business and are looking to form a company, one of the most popular types of business to create is a Limited Company. But what is a limited company and what information is needed to form one? Here at Your Virtual Office, our guide to forming a limited company can help you to gather together the necessary information and we can even take over the process for you to save you a lot of time, effort and worry about doing things right.

What is a Limited Company?

A Limited Company is a registered organisation for your business and is responsible in its own right for everything that it does as well as its own finances, meaning that all transactions are kept separate from the personal finances of the person or persons who founded it. Profits made by this business are owned by the company itself, not the individual who owns or runs it, and it is responsible for paying Corporation Taxes on it's profits before any proceeds can be split among those involves with it.A limited company has members – these are either people or organisations who own shares in the company. It also has directors, the people who are responsible for the day to day running of the company. Directors can also own shares but aren’t required to in order to be a director.

Types of limited company

There are a number of types of limited company that have slightly different formation processes. The most common is called ‘limited by shares’. What this means is that shareholders responsibility for financial liabilities of the company are limited by the value of the shares that they own in. Shareholders will not have their own personal finances or property put at risk should the company get into financial difficulties.An example would be a company that issues 100 shares at £1 each. Two shareholders have 50 shares each and have paid in full. If the company fails, the most these two shareholders would have to pay towards any outstanding debts would be £50 each as this is the value of the shares they purchased. In addition, company directors are not held personally responsible for any debts that the company builds up and don’t have to pay back any company debts as long as they have done nothing illegal.Another type of limited company is a ‘private company limited by guarantee’. This is normally used by not for profit companies such as sports clubs, schools, charitable organisations, fund raising organisations and community groups. This is where the members would financially back the company with a small nominal amount of money that would go towards paying off the debts should the company fail. Members would contribute on the knowledge that they wouldn't expect to see any returns on their investment. All profits made by the company would be reinvested back into it and used in its upkeep.Finally, a public limited company is a company trading on the London Stock Exchange or similar public market. Shares would be open for purchase by the public with the aim of making a profit.

Why opt for a limited company?

One of the main reasons for deciding to become a limited company rather than any other option is that the liabilities for the owners are restricted. The sad fact is that businesses do fail, despite the best efforts of those involved. By creating a limited company, you limit the liability for those involved financially. Knowing that your liabilities are limited in this way can give you great peace of mind should something unexpected happen to the company in the future.There is also a fantastic confidence boost to be had from forming a limited company. The legal identity of the company gives great prestige to your business dealings. The flexibility of a limited company means that it ensures that those involved with the company can change over time without it impacting on the business. Should the company lose a director through retirement or death, then the company will still be able to carry on trading in its own right.There are also some tax benefits open to limited companies that are not available to sole traders.Finally, forming a limited company is quite straightforward, especially when you use a company formation service such as ours. With our help, you can have your business up and running in as little as four hours during any normal working day once the required information is provided.

Forming a limited company

To create a limited company, you need to register your business with Companies House in London. There are several pieces of information that are required as part of this process. You can undertake to do this yourself or you can use our Limited Company Formation service.The following information is required to form a limited company:

• Company name
• Address for the company
• One director and one shareholder minimum
• Memorandum of association
• Details of the company’s shares and anyone with 25% or more control of the company
• Articles of association
• SIC code

You will also need a business account to use for the business that is established before the company is formed. Tax registration is required once the company is formed and a system put in place to record accounts during the year for tax and management purposes.

Company name

The name of the company is a little more complicated than it may first sound. Many people want to call their company after themselves or their location, often wanting to featuring their trade or industry too. but there are stipulations about company names that you have to be aware of. These include not naming your business the same or ‘too alike’ to another company. There are also rules about certain words that cannot be used including ‘royal’ and ‘queen’. Companies House have a full database of what wording you cannot use in your company name and you can check with their Company Name Checker to see if the name you would like to use is available.

Registered Office Address

The registered office address of the business can be where the business is based and where you operate from, your home address or a specific address somewhere else that you have permission to use. This address will be on the public register at Companies House and fully viewable by the general public, so some people prefer not to use their own home address.A registered office address service such as the one provided by Your Virtual Office can allow the business to use our address in London as its registered address.

Memorandum and articles of association

The memorandum of association is an agreement that all shareholders agree to that is a legally binding statement around the formation of the company. Likewise, the articles of association are the rules that govern the company and stipulate how the business will operate. It also includes information about how profits are divided up and what happens if the business is sold.

SIC code

The SIC code (Standard industrial classification of economic activities) is provided by Companies House and details the industry that the business will operate in.

Company formation process

Once this information is gathered together, the process of forming the company can begin. Most of this can be done online via the Companies House website, or you can use a company formation process to ensure that the process will be carried out correctly.Your Virtual Office’s company formation process involves completing an online form via our website where we can collect all the required information needed to form your company. We will then confirm with you and review all the information to ensure it is correct and accurate. If you get stuck on anything or are unsure of what information to provide, don't worry – we are here to help you with some free guidance should you need it. Once the information is verified, we can complete the process of forming your company and provide you with the documents that you will need to keep. These include:

• Certificate of incorporation
• Copies of the memorandum and articles of association
• Minutes of the first meeting
• Share transfer paperwork
• Copies of all the Companies House forms for your records
• You can then consider any additional services you may require from us including registered office service, mail handling and call answering services.

What happens following formation?

Once you are incorporated, you will be required to prepare your statutory financial accounts each year and submit these to Companies House, along with a Confirmation Statement (this used to be called the Annual Return). If your company is trading and not registered as dormant, then you will need to send HMRC your company tax returns and financial accounts. You will be liable to pay the current rate of corporation tax on your taxable profits.

Whether you have physical premises or are an online business, offering ways for customers to contact you is always important. The more options you offer, the happier customers will be but the greatest number will still choose to contact you via the telephone. But answering these calls isn’t always the easier thing, and important or valuable calls can often be missed.You may have to work remotely for a time where accessing a phone network is impossible, or you may spend a large amount of your time in business meetings, conferences and demonstrations where it would be inconvenient for you to take your calls. This is why Capital Office offer a trustworthy and convenient solution for you in our personalised call answering service.

Professional service

For many businesses, being able to have their calls answered promptly in a professional manner is a huge benefit for their reputation and their bottom line. When you are a small business or perhaps have a busy workplace where phone calls are difficult to take, having someone away from the premises to answer your calls can be a crucial part of your customer service plan. Therefore, we created our call answering service for just this reason.Our call answering service offers unlimited call volumes and the calls are answered in your own business’s name. This means customers don’t realise they are ringing a call answering service but think they are speaking to the company receptionist or your personal secretary.All the conversations are kept private and run through a secure system so there’s no concern about customers divulging personal or financial data. Sales calls can be taken and any important calls forwarded to a mobile number of your choice to continue the conversion yourself.The team answering your calls are based in our London offices and absolutely no outsourcing is used. Outside of business hours there is a customised voice mail service available to take your calls 24 hours a day and you can choose your own greeting for this as well as how your calls are answered. Once a call has been answered, it can also be forwarded to your business phone system and there is a private pin protected message service so that only you and your chosen employees can access messages.

Why use the service

As well as offering the professional call handling service that every business needs, our call answering service also screens calls to save you precious time. Sales calls from other businesses are a part of every day life and may be of some interest to you, but often come at the wrong time. Sometimes these calls may not be ones that you are interested in taking. Using our call service allows you to have these calls screened and either forwarded or rearranged as required.All of our call handlers are native English speakers and will have enough basic background information about your business to be able to conduct a polite and professional conversation with your callers. This means that our service offers the highest standard of professionalism and practicality while saving you the cost of having a full-time permanent secretary or receptionist working on your premises.

Setting up the service

Setting up your call answering service couldn't be simpler! You can set up the service by completing the online form. We have different packages available to suit your requirements, ranging from one to twelve month deals so you can use the service for as long as you require.The set up process takes around 5 minutes and once payment is complete, your personalised call answering service starts within one working day. We will also collect information about your business and all the relevant forwarding data we need. A unique 0207 or 0203 number will be allocated for you to issue to your clients and to use on your contact media, and we will give you your message pin and other essential data immediately.

Full Call Answering Features

• Unlimited Volume of Calls
• No Hidden Call charges
• Calls taken in your name
• Choose your own greeting
• Lowest Prices Guaranteed
• No Setup Fees
• Private & Confidential
• Instant Activation – Start Using Today
• Completely private and secure for all clients
• Unique 0207 or 0203 London Number
• Professional Call Handling
• Forward Calls to your mobile
• Caller questions answered
• Sales calls taken
• London Based PA
• Can take number with you
• Native English Speakers
• Calls Screened
• Award Winning Service
• Real London based team – no outsourcing
• Messages forwarded onto you
• Calls routed live to your phone after PA handling
• 24 Hours customised voice mail
• Private Pin Protected Messages