Disposal of company assets

[Flex8]

One of my Ltd company's was a SaaS company (i.e. subscription based income for online software). I am currently preparing the AFS for last year, during which time I sold all of the assets. The company has now ceased trading. (As an aside, I know that a share sale would been better, but this was not an option unfortunately).

I am now preparing to file the accounts and corporate tax online. One of the questions asks if the the company has "income over £1,000 that does not come from your organisation's main trade".

I assume that the sale of assets is considered "income", in which case the answer to this question is yes. Please correct me if I am wrong.

That being the case, it looks like I then need to file the Corp Tax return using commercial software. What are my options here? The accounts are super simple (literally 6 accounts on the P&L and 4 accounts in the BS).

Do I need to pay an accountant to submit these for me, or is there some software that I can use once off? Or something else?

 

[DWS]

One of my Ltd company's was a SaaS company (i.e. subscription based income for online software). I am currently preparing the AFS for last year, during which time I sold all of the assets. The company has now ceased trading. (As an aside, I know that a share sale would been better, but this was not an option unfortunately).

I am now preparing to file the accounts and corporate tax online. One of the questions asks if the the company has "income over £1,000 that does not come from your organisation's main trade".

I assume that the sale of assets is considered "income", in which case the answer to this question is yes. Please correct me if I am wrong.

That being the case, it looks like I then need to file the Corp Tax return using commercial software. What are my options here? The accounts are super simple (literally 6 accounts on the P&L and 4 accounts in the BS).

Do I need to pay an accountant to submit these for me, or is there some software that I can use once off? Or something else?

How were the assets treated in the accounts when you first purchased them?

 

[Daybooks]

Presumably by AFS you mean Annual Financial Satements?
The income from sale of assets is not income unless your business is the purchase and sale of assets for a profit. On the presumption that these assets were capitalised ( put on the balance sheet ) then the income is proceeds from disposal in the accounts and along with the release of the cost and accumulated depreciation will be the profit or loss on disposal.

For corporation tax purposes you also need to dispose of the asset in the capital allowance section bringing in the proceeds.

All accounts are super simple; some just have more volume than others; but regardless of size each has a balance sheet and that comes with fixed overhead in terms of year end account production.

From what you have said you should have at least the following accounts on the balance sheet: Fixed asset cost, Fixed Asset Depreciation, Bank Account, Share Capital, Retained Earnings and Profit and Loss account for the year. Thus more than four.

You don’t have to engage an accountant and you can search online for accounts production and corporation taxation filing software. I don’t have to use an electrician to do my electrical work; but I do for good reasons.

 

[UK Contractor Accountant]

what have you actually sold here - you state all of the assets

- I suspect its the software ownership only that's been sold.

Then begs the question how did you treat the software development costs in the accounts? as a profit & Loss account costs as and when incurred or capitalised onto the balance sheet as an intangible asset and amortised over its expected useful life?

 

[Elliot Green]

Presumably by AFS you mean Annual Financial Satements?
The income from sale of assets is not income unless your business is the purchase and sale of assets for a profit. On the presumption that these assets were capitalised ( put on the balance sheet ) then the income is proceeds from disposal in the accounts and along with the release of the cost and accumulated depreciation will be the profit or loss on disposal.

For corporation tax purposes you also need to dispose of the asset in the capital allowance section bringing in the proceeds.

All accounts are super simple; some just have more volume than others; but regardless of size each has a balance sheet and that comes with fixed overhead in terms of year end account production.

From what you have said you should have at least the following accounts on the balance sheet: Fixed asset cost, Fixed Asset Depreciation, Bank Account, Share Capital, Retained Earnings and Profit and Loss account for the year. Thus more than four.

You don’t have to engage an accountant and you can search online for accounts production and corporation taxation filing software. I don’t have to use an electrician to do my electrical work; but I do for good reasons.

No matter how good the accounts software is, it isn't really a complete substitute for undertaking a course in double entry bookkeeping to get the basics sorted in my view.

I don't imagine we will differ much on this but my view is if you can do it the T account way and do an ETB, then you *might* stand a chance to be able to slot the accounts into statutory format. But doing it from the accounts software without understanding journals, well when such accounts get filed they might *electrocute* HMRC into undertaking a review.

 

[Flex8]

How were the assets treated in the accounts when you first purchased them?

The assets were not purchased - it's essentially the customer base that have existing subscriptions

 

[Flex8]

what have you actually sold here - you state all of the assets

- I suspect its the software ownership only that's been sold.

Then begs the question how did you treat the software development costs in the accounts? as a profit & Loss account costs as and when incurred or capitalised onto the balance sheet as an intangible asset and amortised over its expected useful life?

Software development was expensed when incurred. To be honest, most of the development was undertaken by myself, so there wasn't any actual expense (salary or otherwise). There are no assets capitalised on the balance sheet

 

[DontAsk]

The assets were not purchased - it's essentially the customer base that have existing subscriptions

So are you saying you sold the customer base (i.e. customer details) to a 3rd party?