corporation tax - payment.

[Steve_g]

Hi All,

Quick question, i called my accountants today and they gave me an estimate for corporation tax (I was under the impression I should have been given this estimate months ago..)
This estimate is much more then I was expecting and its due in Feb 2013 and is = to about 1 months turnover. I really don’t think I can pay this in one go, especially given that I will have a VAT return due around the same period.

Am I able to pay this to HMRC in instalments? my accountant was a bit flaky about this and started muttering about penalties and special arrangements.

Cheers

Steve

 

[Robert Pearce]

The special arrangements that your accountant mentioned was probably a reference to the Business Payment Support Service (details are here). You (or your accountant) could ring them and see if HM Revenue & Customs will agree to a payment plan.

 

[Walkol]

Best bit is to phone them asap. I've found that the quicker/earlier you alert them to a problem and ask to come to an arrangement, the more likely they are to assist you.

I realise this may sound condescending, but in future it may be wise to get 1/4ly or 6 monthly management accounts done, with rough corp tax calcs, so you can be fully prepared and informed on your liabilities due.

 

[MyAccountantOnline]

Hi Steve

I'd go back to your accountant for some advice on this before calling HMRC.

He/she really is the best person to advise you on this as he/she will have the full facts.

It will also help to have some figures ready on what payments you can make and when.

 

[elaine@cheapaccounting]

The rate of corporation tax for small companies is 20% of profits - so that is what should be put aside each month for future budgeting purposes.


Yes you can arrange a payment plan but I hear some alarm bells from what you say – cannot afford the entire CT bill and have a VAT payment at same time.


When you collect the vat on sales it is not your money to spend and needs to be paid to HMRC less the input vat on your purchases.


Add to this that you will already be part way through your next financial year and the CT should have been put aside as you go for that as well.


I am not having a go but trying to help by suggesting that there may be some cash flow, over spending issues with your company. I really do think you may benefit for a review of your current position and a budgeting / cash flow management plan.

This would be a good approach to assessing how much you can realistically pay towards the forthcoming CT bill – once you suggest a payment plan to HMRC they are sticklers about keeping it and will pursue aggressively if missed. Good luck

 

[MyAccountantOnline]

....once you suggest a payment plan to HMRC they are sticklers about keeping it and will pursue aggressively if missed. Good luck

I agree entirely and hence my suggestion to speak with your accountant before contacting HMRC.

 

[Steve_g]

Thank all for the help.
I have no idea about accounts, I left everything up to the accountants – I have mentioned a few times over the last 6 months about corporation tax but this is the first time they have given me a number.
To be honest I have quite a few issues with my accountant company and will be moving as soon as this mess is sorted out.
I have an appointment next week so will try and get it sorted then with them directly, if no luck I will contact HMRC.
I wont be making the same mistakes next year and will be keeping much better track of my accounts and accountants.
Thanks again.
Steve

 

[elaine@cheapaccounting]

The thing is as much as you leave these things to your accountants they can only advise on CT due once they have done the year end accounts.

That is why we recommend a cloud accounting system to clients to keep up to date through the year and one like our free one or Free Agent that gives a CT projection as you go through the year.

This really is the best solution for managing your accounts, cash flow and your business. Let me know if you want to chat to one of our accountants if you are thinking of moving.

 

[Jeremiah@RHJ Accountants]

I would also reccommend moving to an accountant where they can do things like regular dividend and corporation tax calulations monthly or quarterly.

This way your accountant can let you know what to save for corporation tax each month and if you put this in a separate business bank account or just don't spend it, then when it comes time to pay corporation tax you won't have to find a huge amount all at once.

This is one of the many things i do for my clients and i think it is an invaluable service for any accountant to provide.

So make sure your accountant can give you that regular contact which it sounds you may need and not one that takes too long to reply back to you.

My policy is to reply to all calls and e-mails within 24 hours

Jeremiah Jordan
Smith Craven Chartered Accountants

 

[cheaper accountant]

I completely agree with the other comments and I think you're making the right move by looking to seek the services of a new accountant.

I see examples of people like yourself getting into problems when they are faced with unexpected tax bills all too often after not receiving guidance from their accountant.

 

[Steve_g]

Thanks all,
Its exactly that.. im not receiving guidance.

When I first approached them I explanted I have no idea about account and I would just do as I was told – The accountant assigned to me is a nightmare to get hold of (always on holiday, ill or working part time) and have since found out that they are a trainee and still attend college.

While I have so many helpful people here…


I have Sage 50 2011 and need to run a inventory cost report – its not something I can do with my version of Sage but a friend has Sage 50 Pro 2010 – plan was to import my data run report but it 2010 gives me an error on opening that my back up is not compatible as it was created on a later version of Sage – does anyone know a way to convert this back up? or a walk around?
Only doing the above as I disagree with my accountants valuation of stock and think its adding a lot of my corporation tax.
Thanks
Steve

 

[elaine@cheapaccounting]

Thanks all,
Its exactly that.. im not receiving guidance.

When I first approached them I explanted I have no idea about account and I would just do as I was told – The accountant assigned to me is a nightmare to get hold of (always on holiday, ill or working part time) and have since found out that they are a trainee and still attend college.

While I have so many helpful people here…


I have Sage 50 2011 and need to run a inventory cost report – its not something I can do with my version of Sage but a friend has Sage 50 Pro 2010 – plan was to import my data run report but it 2010 gives me an error on opening that my back up is not compatible as it was created on a later version of Sage – does anyone know a way to convert this back up? or a walk around?
Only doing the above as I disagree with my accountants valuation of stock and think its adding a lot of my corporation tax.
Thanks
Steve

John London on here is the Sage guru - I would suggested contacting him or Sage support on the Sage issue.

 

[Steve_g]

John London on here is the Sage guru - I would suggested contacting him or Sage support on the Sage issue.

Thanks for the tip, do you know his user nume? cant find him on the menber list, will PM him.

Thanks

Steve

 

[elaine@cheapaccounting]

Sorry my fault - it's
[FONT=arial, sans-serif]johndon68[/FONT]



And not John London - ooops

 

[Steve_g]

Sorry my fault - it's
[FONT=arial, sans-serif]johndon68[/FONT]



And not John London - ooops

Thank you very much

 

[brownkane]

I would agree with the advice already given, that you should find a new accountant who will keep you informed on a monthly basis of your corporation tax liability. You are then best to put this money aside, even into a separate account earning you some interest!!, so that you are not left with any unexpected bills.

 

[Steve_g]

Just wanted to say thank your or John for helping me generate the report! He was a huge help and a really nice chap.
As it turns out my accountant grossly over estimated my stock holdings and as a result gave me the unpleasant surprise.
The tax figure is now in line with what I expected.
Thanks all for the help!
Steve

 

[Walkol]

As it turns out my accountant grossly over estimated my stock holdings and as a result gave me the unpleasant surprise.

Further to this point, should you not be providing your stock holdings at year end to your accountant?

 

[elaine@cheapaccounting]

Just wanted to say thank your or John for helping me generate the report! He was a huge help and a really nice chap.
As it turns out my accountant grossly over estimated my stock holdings and as a result gave me the unpleasant surprise.
The tax figure is now in line with what I expected.
Thanks all for the help!
Steve

Glad it has all worked out for you.

Isn't this forum just fabulous

 

[Steve_g]

My accountant didn’t ask for anything, when I questioned them on the stock estimate they said they came to that number from other reports I provided them (I fail to see how they could have made an estimate on the previously provided documents)

This is my first year end and assuming my accountants had a hold on the situation I just did as I was asked, I won’t be making that mistake again – will be in closer communication with my next accountant.
Thinking about making a complaint to the franchise once my accounts are completed, I have had so many issues over the last year

Thanks again all.

Steve

 

[Wild Goose]

Ahha, franchise accountants, you say.

So the over-stated stock figure was their guesstimate?

btw don't be hard on yourself for not putting aside corporation tax. In my experience, many many small companies are reliant on next year's profits to pay last year's corporation tax.

 

[elaine@cheapaccounting]

Thinking about making a complaint to the franchise once my accounts are completed, I have had so many issues over the last year

Thanks again all.

Steve

Steve

Do make sure that the franchise has a complaints process - not all do [we do needless to say - although its not well used ]

 

[Wild Goose]

Steve

Do make sure that the franchise has a complaints process - not all do [we do needless to say - although its not well used ]

Oops sorry Elaine, I've been absent quite some time and had no idea you were performing the franchise waltz; I do hope I didn't tread on your toes.

Ahhem, let me make it absolutely and unequivocally clear to readers that any implied cynicism towards tax franchises, if inferred, relates solely to THE branded High Street franchise with the low customer satisfaction rate, and not to Elaine's franchisees who are of course wonderful.

btw who are all these "Cheaper Accounting" and "Even Cheaper Accounting" firms? Reminds me of Edmund Blackadder's Young Pitt and Even Younger Pitt ("Pitt the Ebryo") I guess such imitation is indeed flattery.

 

[Anonymouse72]

btw don't be hard on yourself for not putting aside corporation tax. In my experience, many many small companies are reliant on next year's profits to pay last year's corporation tax.

thank you! i've been starting to think we were the exception to the rule on this so nice to hear that we might not be alone.

I know we should be putting % aside for the CT bill, but there just never seems to be enough cash flowing in the business to do this. we'd be dipping into our overdraft every single month if we did, & that just doesn't make sense to me? :|

we pay all our suppliers on time (well, within a week on their due dates usually), PAYE & VAT are all up to date. we might have spread previous CT over a couple of months when it became due, but we've never not paid it.

we're in the construction trade & have had some very hard times since 2008, along with plenty of others. quite a few companies we deal with have gone to wall in recent years so i consider it an achievement to still be standing now!

we simply cannot predict future workflow any more than a month in advance, i'd guess that around 75% of orders are last minute/required yesterday. planning in these circumstances is nearly impossible & times are still tough. on the bad days, when i look at what we earn from the business & what we pay our staff, it hardly seems worth the hassle of being business owners - but it's still just on the right side of that line, at the moment...

anyhoo, now i've got that off my chest! have a great weekend everyone!

 

[elaine@cheapaccounting]

Oops sorry Elaine, I've been absent quite some time and had no idea you were performing the franchise waltz; I do hope I didn't tread on your toes.

I had missed you -where have you been

Ahhem, let me make it absolutely and unequivocally clear to readers that any implied cynicism towards tax franchises, if inferred, relates solely to THE branded High Street franchise with the low customer satisfaction rate, and not to Elaine's franchisees who are of course wonderful.

Thank you

btw who are all these "Cheaper Accounting" and "Even Cheaper Accounting" firms? Reminds me of Edmund Blackadder's Young Pitt and Even Younger Pitt ("Pitt the Ebryo") I guess such imitation is indeed flattery.

I know - isn't it so funny. They are popping up all over the place

 

[elaine@cheapaccounting]

thank you! i've been starting to think we were the exception to the rule on this so nice to hear that we might not be alone.

I know we should be putting % aside for the CT bill, but there just never seems to be enough cash flowing in the business to do this. we'd be dipping into our overdraft every single month if we did, & that just doesn't make sense to me? :|

You need a good accountant to sit down and explain the key figures that you should be monitoring - when to worry and when not to

You don't have to know all things accounting but there are certainly a few bits and bobs that could help.

Get your accountant to help or give us a call if we can - have a good weekend

 

[Anonymouse72]

(tried to quote your post Elaine, but 'computer says no'. it seems to think there's a website link in there somewhere (your user name?) & i'm not allowed?!)

thanks Elaine , don't worry, i keep track of everything on a monthly basis (even trying to produce a 3 month advance cashflow prediction that is frequently based on what direction the wind is going! ) & am pretty quick to spot when we're in 'brown stuff hitting the fan' mode! .

having been on the verge of redundancies or possibly just shutting up shop on a couple of occasions over the past few years, we've learnt the hard way that we have to react much quicker if work is drying up.

now, where's the wine, it's Friday!

 

[elaine@cheapaccounting]

now, where's the wine, it's Friday!

sounds like you deserve a glass or two hic

 

[cheaper accountant]

btw who are all these "Cheaper Accounting" and "Even Cheaper Accounting" firms? Reminds me of Edmund Blackadder's Young Pitt and Even Younger Pitt ("Pitt the Ebryo") I guess such imitation is indeed flattery.

I'll have to look them up to see if they have a "cunning plan" that I'm not aware of

 

[Wild Goose]

I'll have to look them up to see if they have a "cunning plan" that I'm not aware of

Like giving away toy meerkats, for instance

Where will all this discounting end? Inevitably with the ultimate budget service, I suppose: and with that in mind I've already purchased the domain name freeaccounts.co.uk just in case I ever feel the urge to join in

 

[Tej]

Like giving away toy meerkats, for instance

Where will all this discounting end? Inevitably with the ultimate budget service, I suppose: and with that in mind I've already purchased the domain name freeaccounts.co.uk just in case I ever feel the urge to join in

LOL WildGoose

You gonna have a shedload of the normal DIY accounts wallahs...