Tax advice for company who only traded for one month

[0304869]

Hi,

I'm new to joining the forum, but have used it for the last year or so. I can't seem to find answers to my particular situation. Hopefully someone can give me some advice on this.

I registered a limited company in Dec 2008, and it was dormant. I basically just registered it to reserve a name.

I decided to start trading after I lost my job last year. So I filled out the form, and sent it to HMRC.

After a month of trading, i realised that it wasn't the right time to go it alone. So since the start of trading, i have only turned over £350.00. (eg. £350.00 in sales, with 0.00 profit.

My first year accounts are due at the start of Sep 2010, and i dont really know what to do.

Do I still need to submit full accounts, when the company has done next to no business?

Will I need to pay an accountant to the work required?

Any help would be appreciated!

Thanks,

Graham.

P.S. I don't want to wind-up the company, i just want to get through the legal stuff as easily as i can, so maybe i can start again next yer.

[Jaydee]

You will need to submit accounts to Companies House and tax return/computation and accounts to HMRC.

You do not need an accountant if you know what you are doing, as clearly on such modest turnover, tax planning will not be required.

Otherwise, depending on what month it was that traded, you could consider shortening the first accounting period to the end of the month prior to the trading month so that you can file dormant accounts, and then perhaps you would have had more "value" out of the company if it re-commences trade prior to the second year-end.

[0304869]

You will need to submit accounts to Companies House and tax return/computation and accounts to HMRC.

You do not need an accountant if you know what you are doing, as clearly on such modest turnover, tax planning will not be required.

Otherwise, depending on what month it was that traded, you could consider shortening the first accounting period to the end of the month prior to the trading month so that you can file dormant accounts, and then perhaps you would have had more "value" out of the company if it re-commences trade prior to the second year-end.


Sorry, most of that has went straight over my head

So, in other words, whether you have turned over 35,000 or £350.00, I would still have to pay an accountant hundreds of pounds to make accounts if i dont know what i'm doing?

It just seems daft to pay someone so much money to do something that would probably take no time.

[Jaydee]

Your turnover is irrelevant from the point of view of dealing with your compliance obligations.

Whether you need an accountant or are able to do it yourself, only you will know!

What was the exact period that traded?

[0304869]

I definately can't do this myself and i dont have anyone to show me.

Here's the details I have from companies house and HMRC:

Accounting period began: 16-11-2009

First account period end date: 15-11-2010

Companies house says, "Next accounts due 08-09-2010"

I only traded from the 16-11-2009 to 30-11-2009. Only one sale was made for £350.00, and that was just paid out in costs. So i literally stopped before i even got going. I really regret not leaving this dormant. There is a total of 5 transactions in this period. To put this in a spreadsheet would take about 2 minutes.

Thanks for getting back to me.

[Jaydee]

OK, my suggestion of shortening your first accounting period will not work then as your trading period was at the start of the year rather than the end.

You could try going it alone and submitting returns online with help as required from the forum, or else go for one of the firms that post regularly on here to assist more formally - perhaps Elaine if cost is a critical factor?

[0304869]

Yes, money is a factor. I do have time though, which is why i'm trying to find out things now.

There is one thing i really dont get.

If my year end date with HMRC is 15-11-2010, but companies house states that account due date is 08/09/2010.

Does this mean i need to prepare two sets of accounts? One that goes up to the companies house date of 08/09/2010, and then another set to HMRC up to 15-11-2010?

[Jaydee]

I never noticed that CH siad that your accounts are due on 8/9/10 - so was your company incorporated on 8/12/08 with an accounting reference date of December (per Companies House WebCheck site)?

[0304869]

I never noticed that CH siad that your accounts are due on 8/9/10 - so was your company incorporated on 8/12/08 with an accounting reference date of December (per Companies House WebCheck site)?


Yes, thats correct:

Accounting Reference Date: 31/12
Last Accounts Made Up To: (NO ACCOUNTS FILED)
Next Accounts Due: 08/09/2010
Last Return Made Up To: 07/12/2009
Next Return Due: 04/01/2011

HMRC YEAR END: 15-11-2010

[Jaydee]

OK - so that's great.

1. Shorten the first ARD to October 2009 instead of December 2009.

2. File dormant accounts for the period 8/12/08 to 31/10/09.

3. Your first year with any trade in it will then be the year ending 31/10/10 (which will include your trading period 15/11/09 to 30/11/09).

4. Your trading accounts need not be prepared until 31/7/11 for Companies House and 31/10/11 for HMRC (so you have ages yet).

5. Contact Elaine or similar if you want to pay for their preparation, or else go on an HMRC course if you want to try yourself - but at least you will now have plenty of time to organise it.

[0304869]

OK - so that's great.

1. Shorten the first ARD to October 2009 instead of December 2009.

2. File dormant accounts for the period 8/12/08 to 31/10/09.

3. Your first year with any trade in it will then be the year ending 31/10/10 (which will include your trading period 15/11/09 to 30/11/09).

4. Your trading accounts need not be prepared until 31/7/11 for Companies House and 31/10/11 for HMRC (so you have ages yet).

5. Contact Elaine or similar if you want to pay for their preparation, or else go on an HMRC course if you want to try yourself - but at least you will now have plenty of time to organise it.

Ok, i think i'm beginning to get this.

So if i change the ARD to OCT 2009, and file dormant accounts from the period outlined, i dont need to worry about this again until July 2011???

[Jaydee]

Exactly.

You can shorten the year-end and file the first dormant accounts via the online filing on Companies House website.

It would be a good idea to send the dormant accounts to HMRC too to verify that no CT600 is due although I suspect that they already know (perhaps from the CT41G that you filed) as they appear to realise that your accounting period commenced on 15/11/09.

[0304869]

I've just changed the ARD online, and will file the dormant accounts once that has went through in a few days.

Weight off my mind!

Thanks for your patience. I appreciate your time and help on this.