onesandnoughts
4th February 2006, 16:56
Hello everyone,
So, I'm trying to do my first ever set of company accounts and corporation tax calculations for my little company. I _think_ I've managed to get a reasonable handle on it, but there are a few things I just wanted to check.
Over the year, there were only a few different things going on in the accounts:
1. A loan - I loaned some of my personal money to the company to get it started.
2. Sales - I'm developing and selling software, and these were all electronic downloads - so no physical product or raw materials exist.
3. Service charges - I'm paying a third party company to handle order processing, and they of course charge for this. I'm also paying for web-hosting, etc.
4. Equipment purchases - A fair amount of computer hardware and various software (for software development and general business use, not for resale).
5. Training purchases - Relevant magazine subscriptions, and some training videos.
6. I have not taken _any_ money out of the company at all so far.
For my corporation tax, am I correct in the following:
A. Income is all money from sales, bank interest, etc, but not the loan (since it has to be repayed).
B. For allowable expenditure, I assume I can deduct all of item 3, and I can deduct 50% of item 4 as a first year SME capital allowance. I'm guessing that I can also deduct all of item 5 - but I'm not so sure.
Profit/Loss...
My balance sheet says that the company more or less broke even, with a very small retained profit. The loan plus income from sales was almost the same as the amount spent on equipment and service charges. Since the equipment was all bought new in the year, it doesn't have any depreciation recorded for the that year (should it have?)
However, for my Corp. tax, I'm making a significant loss, due to the 50% capital allowance outweighing the small amount of sales income.
C. It seems slightly odd to me that at the same time as my balance sheet reports a slight profit, my corp. tax claims a loss. I'm guessing that this is entirely reasonable/normal, but just wanted to check.
D. One other thing - at the moment I understand that I can make up to 10k profit with 0% corp. tax. I recall reading somewhere that as of this April this was going to be scrapped, and it would by 19% from the very first pound of profit... Is this true - I can't find any reference to it now.
Thanks for reading!
Steve
So, I'm trying to do my first ever set of company accounts and corporation tax calculations for my little company. I _think_ I've managed to get a reasonable handle on it, but there are a few things I just wanted to check.
Over the year, there were only a few different things going on in the accounts:
1. A loan - I loaned some of my personal money to the company to get it started.
2. Sales - I'm developing and selling software, and these were all electronic downloads - so no physical product or raw materials exist.
3. Service charges - I'm paying a third party company to handle order processing, and they of course charge for this. I'm also paying for web-hosting, etc.
4. Equipment purchases - A fair amount of computer hardware and various software (for software development and general business use, not for resale).
5. Training purchases - Relevant magazine subscriptions, and some training videos.
6. I have not taken _any_ money out of the company at all so far.
For my corporation tax, am I correct in the following:
A. Income is all money from sales, bank interest, etc, but not the loan (since it has to be repayed).
B. For allowable expenditure, I assume I can deduct all of item 3, and I can deduct 50% of item 4 as a first year SME capital allowance. I'm guessing that I can also deduct all of item 5 - but I'm not so sure.
Profit/Loss...
My balance sheet says that the company more or less broke even, with a very small retained profit. The loan plus income from sales was almost the same as the amount spent on equipment and service charges. Since the equipment was all bought new in the year, it doesn't have any depreciation recorded for the that year (should it have?)
However, for my Corp. tax, I'm making a significant loss, due to the 50% capital allowance outweighing the small amount of sales income.
C. It seems slightly odd to me that at the same time as my balance sheet reports a slight profit, my corp. tax claims a loss. I'm guessing that this is entirely reasonable/normal, but just wanted to check.
D. One other thing - at the moment I understand that I can make up to 10k profit with 0% corp. tax. I recall reading somewhere that as of this April this was going to be scrapped, and it would by 19% from the very first pound of profit... Is this true - I can't find any reference to it now.
Thanks for reading!
Steve