Benefits to forming limited company on April 6th

**PhilAtBFCA** · 22 January 2009, 07:57

Limited Company 6th April

Hi Guitarist,

Interesting question this one.

If you start your company anytime in April you will automatically have a year end allocated for end April. So If you start a company in April you could choose your year end to be 6th April and advise HMRC and Companies House.

But.....

Corporation Tax Changes tend to start on 1st April, whereas personal tax changes start on 6th April so you would not have a big advantage in forming a company on 6th april.

If you decide on a Limited Company then I would go online and form it anytime. ( Its £25.57 here ) You could then choose the year end which is convenient to you.

March 31st may be a consideration. Useful if you are inside IR35 as the final accounts can all be reconciled with the deemed payment calculation. But outside IR35 it gives you less room to move on dividends.

For an April year end ( April 30th ) You could finalise accounts in April, and have raised dividends in two tax years, that can be useful sometimes.

Don't forget that as a Limited Company owner you have control over when you get the income ( obvious limitations accepted ) so therefore you have some control over which personal tax year the income falls in.

So you could form company in March, start trading in April, take PAYE in April and dividends in the 09/10 tax year.

And even if your doing the books yourself, dont forget to "get an accountant"

HTH

Phil

**Gonzo** · 22 January 2009, 08:25

Originally posted by Guitarist View Post

Hello everyone. First-time poster.

I am a contractor currently working through an umbrella company but looking to start my own limited company.

Easy question as per the title: will forming my company to start trading on April 6th make my corporation/personal tax easier to calculate if I wanted to look after my own accounts?

Basis periods have never been a strong point. Please don't reply with "get an accountant". It is merely an option at this point, and I am in no hurry.

THANKS

I am sure that is a comprehensive answer from Phil, but the brief answer is no, your company tax and your personal tax are completely separate so there is no benefit from aligning them, unless you are going to count things like doing all the work at the same time as a benefit.

Oh, and get an accountant. Really, get an accountant.

How much do people think that they can save by going DIY ? 4 days' billing if on a crap rate, 2 days' billing if on a good rate, 1 days' billing if on a supremo rate. It is never worth going the DIY route.

hth

**QwertyBerty** · 22 January 2009, 09:32

My financial year end just happens to be end of March, so I don't need to calculate CT over 2 different CT years. The extra calculation is not hard but it is one less thing to do (unless you hire an accountant). It's also pretty close to the personal tax year.

QB.

**Waldorf** · 22 January 2009, 09:35

As has already been said it does pay to get an accountant, mine will set your company up for free http://www.nixonwilliams.com

**Guitarist** · 22 January 2009, 11:37

Thanks Phil (and everyone else),

All very interesting this.

I'll have a think and come back!

Cheers

**xoggoth** · 22 January 2009, 20:34

You can always change your company year end later if you wish.

Although company/personal returns are separate for tax purposes, they do use much of the same info like expenses claimed from company, salary and divi paid etc. The same date might make your paperwork a bit easier when filling in P11D, tax return etc as all you need is on one year's company records instead of two.

Benefits to forming limited company on April 6th