Hi, and welcome back to the final lesson in our Pro Masterclass on property investment through limited companies. In this lesson, we're tackling a critical aspect of running your company, filing accounts, returns, and paying tax. Understanding your responsibilities here is essential for staying compliant, avoiding penalties, and making sure you're not paying more tax than you need to. Let's break it all down. As a limited company owner, you have several obligations when it comes to filing accounts and returns. Let's start with the basics, what do you need to file and when? Every year your limited company needs to file annual accounts with Companies House and a corporation tax return with HMRC. These accounts give a detailed view of your company's financial performance including a balance sheet and a profit and loss statement. The corporation tax return on the other hand shows HMRC how much profit your company has made and how much tax you owe. In addition to your annual accounts and tax return, you'll need to also file a confirmation statement with Companies House. This is a simple document that confirms the basic details of your company, like the names of directors and shareholders and the registered office address. It's due every year and is a quick way for Companies House to ensure their records are up to date. If you own a residential property worth more than half a million pounds through your company, you might also need to file an ATED return. This is a tax on properties held in a company, and the amount depends on the value of the property. As your company's financial year comes to a close, it's time to start preparing your accounts. By using an accounting app like Provestor throughout the year, this end of year process will be straightforward. You'll need to look back over your records and add in any missing transactions and claim any outstanding personal expenses such as mileage that you've missed throughout the year. Now is also a good time to check you've got copies of receipts, invoices, and mortgage statements. All of these records are required for ensuring your accounts are accurate. So do you need an accountant to prepare and file your company's accounts and tax returns or can you do it all yourself? Now while it's technically possible to file them on your own, most business owners choose to work with an accountant or use an app like Provestor's. The rules around accounting and tax are complex and making a mistake could lead to penalties or paying more tax than necessary. If you don't need a full service accountant, Provestor's low cost tax app could be the ideal middle ground for you. It will help you get your records in order and prepare and submit accurate accounts and tax returns with a click of a button without needing a degree in accounting and finance. You might be wondering if you need to submit all of your receipts to HMRC when filing your tax return. The answer is no, you don't need to send your receipts to HMRC, but you do need to keep them for at least six years. If HMRC decides to investigate your company, they'll want to see evidence of your income and expenses, so it's important to keep detailed and organised records. Speaking of records, what exactly do you need to keep? Well, this includes everything from bank statements and invoices to receipts for expenses and records of mileage if you're claiming travel costs. You'll also need to keep copies of your annual accounts, tax returns and any correspondence with HMRC or Companies House. Once you've filed your accounts, it's time to calculate and pay your corporation tax. For small profit making companies, the corporation tax is currently 19%. To calculate your tax, you'll start with your company's profit, subtract any allowable expenses and apply the tax rate. Remember expenses on mortgage interest on buy to let properties, salaries and business costs are all deductible, reducing your taxable profit. On the other hand, capital purchases like improving your property are not deductible. If you're using the Provestor app, your corporation tax will be calculated automatically. One common question is whether you can claim mortgage capital repayments as an expense. The answer is no. Only the interest portion of your mortgage payments can be claimed as an expense. The capital repayment, which is the amount that reduces the principal of the loan balance, is not deductible. So how can you reduce your tax bill? Well, the key is to track everything, even the small things like office supplies, mileage and minor repairs, and they can all add up over the year. Having a good system in place like the Provestor app can help you keep track of all your expenses ensuring you don't miss any deductions. The app also helps you manage your mortgage interest which is needed for accurate tax calculations. If you're running a holiday let or own commercial property, another consideration is whether you need to register for VAT. If your company's taxable turnover exceeds £90,000 in a twelve month period, you're required to register for VAT. Even if you're below the threshold, it might be worth registering voluntarily. Apart from your annual return, you also need to keep Companies House up to date with any changes to your company, such as appointing new directors, changing your registered office address, or even issuing new shares. Failure to file these updates or missing deadlines can result in penalties. If you don't file your accounts or tax returns on time the penalties can be severe. For late filing of accounts to company's house you can get fined up to £1,500 depending on how late they are. HMRC can impose penalties for the late filing of your tax return starting at a hundred pounds and increasing over time plus the interest on any unpaid tax. Now what happens if you make a mistake after you've submitted your accounts or tax return? If you realize you made an error, it's important to correct it as soon as possible. You can usually file a set of amended accounts with HMRC within twelve months of the original deadline. If the mistake is in your accounts with Companies House, you'll need to submit a revised set of accounts. And if you have made a mistake, it could be best to talk to an accountant for advice. The key take away here is that staying on top of your filing requirements and deadlines is crucial to running a successful limited company. Keeping detailed accurate records and using tools like Provestor can help you avoid common pitfalls and ensure that your business stays compliant. To sum up, filing your accounts and tax return is a critical part of running a limited company, and getting it right can save you a lot of headaches and money. Whether it's preparing for year end, calculating your tax, or keeping company's house updated, understanding your responsibilities and using the right tools can make all the difference. With Provestor, you can rest assured that as a property investor, you'll have everything you need for hassle free filing of accurate accounts and tax returns. This brings us to the final lesson in this pro masterclass. Coming up next, I'll give you a brief summary of this entire masterclass and give you some ideas on what you can do next in your property investment journey.