The Revenue and Customs service was created in 2005 when the former departments of the Inland Revenue and Customs and Excise were joined.
The new organisation’s combined responsibilities now include the collection and assessment of taxes on both individuals and companies for the UK government.
Following every UK company formation, Revenue and Customs will want to know of its existence and who the principles of the business are. Then will then incorporate these details in to their system and will use them to send out notices, forms and other correspondence at the appropriate time.
After completing a company registration, there are several taxes which might become relevant to it, either immediately or later on in its life.
In order to comply with their statutory obligations, directors should be aware of the requirements relating to each tax and how they must act to ensure that they are not in breach of any regulations.
Some of the main taxes which might affect a newly incorporated company are as follows:
When a company has more income than expenses in an accounting period, Revenue and Customs will expect a payment of corporation tax to be made to it.
The calculation of how much tax is payable can be complex depending on the nature of the business and the items for which monies have been received and paid.
The salient parts of such calculations would be included on the company’s corporation tax return together will the payment which is due.
Read more on Corporation Tax
When a company sells goods or provides services, VAT might be charged on top of the stated asking price.
Any VAT element which is received does not belong to the company but rather has been collected on behalf of Revenue and Customs and must be paid over to them.
There is an allowance whereby any VAT paid by the business can be offset against this amount and the net figure remitted to HMRC usually on a quarterly basis.
Read more on VAT
PAYE and National Insurance
Where payments are made to employees, the company again acts as a tax collector by calculating and deducting from salaries any PAYE and national insurance (NIC) which the person should pay.
These amounts are generally remitted to Revenue and Customs on a monthly basis to coincide with the frequency with which employees are usually paid.
Unlike VAT, PAYE and national insurance administration gives rise to an annual return reconciling the twelve payments to an overall yearly calculation, resulting in a statement of any over or under charge.
Read more on PAYE and National insurance
Contacting Revenue and Customs
After forming a company, suitable preparations should be made as to how to deal with what might seem the multitude of taxes and the regulations which relate to each.
The majority of trading companies will pass some or all of the tasks of doing this over to an accountant whilst they concentrate on growing and running their businesses.
In cases where the individual chooses to engage Revenue and Customs directly, they will need to contact them regarding the three (and possible more) taxes.
This can be done via the telephone using the helpline service or online through the government gateway system. With the exception of the traditionally busy tax periods such as late January, March and early April, Revenue and Customs can usually be reached without undue waiting.