By Lynne Gowers on 11th August 2017

Know your limited company responsibilities – how one company director floundered

company director responsibilities

The owner-director of a fish & chip shop in Aberdeen has found himself on the hook with HMRC and Companies House for failing to keep proper accounting records.

Keith McGilvray was disqualified as company director for 7 years after an Insolvency Service investigation found he had failed to maintain proper accounting records and caused his company to trade on a cash basis.

His company, Frogfish Limited, of which he was sole director, was placed into compulsory liquidation in June 2016 with liabilities of £94,080, following a winding up petition lodged by HMRC.

Without accurate accounting records for the period under investigation, the authorities could not verify whether receipts were a true reflection of sales and if cheque payments were actually company transactions. In addition the Insolvency Service could not verify the amount paid in wages and resulting PAYE liability owed to HMRC.

Mr McGilvray also failed in his statutory obligations to file annual accounts and VAT returns for the period in question.

Understanding company director responsibilities

The case highlights the importance of understanding the key duties that are part and parcel of being a limited company director.

Your limited company is a legal entity in its own right, completely separate from your personal finances and assets. As director of the company you have certain legal obligations to Companies House and HMRC, including:

  • Annual compliance statement – this provides Companies House with basic information about your company, including the directors, company secretary, shareholders, share capital and registered office address.
  • Annual accounts – these should be filed with Companies House within 9 months of the anniversary of your company’s date of incorporation, and are publicly available.
  • Corporation Tax – as a company director you must register with HMRC for corporation tax within 3 months of starting to trade, then complete an online corporation tax return annually.
  • PAYE, NI and VAT – If you employ people you will have responsibilities relating to PAYE, National Insurance and pension auto-enrolment. If your turnover exceeds the VAT threshold, or if you voluntarily register for VAT, you have obligations regarding maintaining VAT records.

Having an accountant you can trust

While the responsibilities of being a limited company company are yours alone and should not be taken lightly, it helps immensely if you have the right professional support to guide you on your statutory accounting obligations.
Your accountant will help you deal with all of your duties to HMRC and Companies, leaving you to focus on growing your business.

Find out how Boox makes things easy

Get the guide

We have put together a simple guide to help you understand and comply with the rules and responsibilities that come with the role of company director. To download this free business guide, just click on the link below:

Director-Responsibilities-Guide

Lynne Gowers Written by Lynne Gowers

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