Anna’s Accountancy Alerts – Week 33 (16th – 22nd November 2020)

Two freelance business women in their startup small business.

Companies Being Struck Off Again

Companies House has resumed its striking off procedures, after putting them on hold in March because of coronavirus.

Form DS01, signed by all the directors (or a majority, if more than two), can be filed online or by post.

Online filing is slightly cheaper (£8 as opposed to £10), and is likely to be dealt with more speedily.

Other admin. Close the company bank account, transfer domain names and IP rights, and cancel any licences with the relevant authority.

Companies House can strike a company off if it appears not to be trading, usually because it has failed to file its accounts and confirmation statement. This process restarted on 10 October.

Making Tax Digital (MTD) Update

If you’re self-employed or a landlord with taxable turnover above £10,000 per annum, Making Tax Digital (MTD) for income tax will be mandatory for your first accounting period starting on or after 6 April 2023.

You’ll need software to keep accounting records digitally, and file the quarterly updates required by HMRC. At the end of the year, you must make any necessary accounting adjustments and finalise your tax position. The process will replace the self-assessment tax return.

There are many restrictions which prevent businesses from using the MTD for income tax pilot scheme. However, HMRC says most of these will be removed by April 2021. Joining the pilot is likely to make your life easier in the long run. Start by using HMRC’s online tool to check if you’re eligible then obtain the right software.

Tax Impact Following A Change In Business

If there’s a significant change to the type of business, HMRC may treat your old business as ended and a new one started or that you’re now operating two trades. Special tax rules can then apply, plus you’ll need to keep separate business records for each trade. If in doubt consult your accountant for advice sooner rather than later.

Stay Up-To-Date With Coronavirus & Brexit News

Coronavirus has affected us all. Whether you’re a sole trader, employer or employee. Stay up to date with the latest news – including government support, tax implications, and more.