Filing an abbreviated account, help please!

[morningbird]

Hello Everyone,

I run a micro-entity Ltd company. The first year abbreviated account filing is due very soon! I'm currently working on it myself, as I thought there were only a few transactions done last year, not enough to bother having an accountant to do it for me. Anyway, before validate it online, I just simply want to post what I've filled out here as the following, hope if anyone could check it for me if I get it all correct, please? Appreciated!

I initially planed to inject £10000 (my personal savings) as capital into the business, but ended up with only £1000 properly transferred from my personal account into business account during the first financial year. The rest £9000 is still in my personal saving account. Does it matter actually?

I considered the £1000 as Director's Loan. (Is Director's loan the capital? Not sure if there's a better way to define the introduced money which injected by owner at time, I just simply take it as Director's loan. Is it okay?)
Bank Balance at end is £420
My turnover is £120
Cost of sales and admin expenses etc in total are £700
Profit and loss before tax is -£580 ( A Loss)
Corporation tax is -£116 (negative tax is correct? Do I need to pay the negative tax then? Looks very odd)
Profit and Loss after tax is -£464 (Is it correct?)
No Dividends
No PAYE setup


Called up share capital not paid ( £1)

Fixed assets
Intangible ( ____ £)
Tangible ( ____ £)
Investments ( ____ £)
Total fixed assets (£0)

Current assets
Stocks ( ____ £)
Debtors ( ____ £)
Investments (£)
Cash at bank and in hand ( £420 ) (Bank end balance)
Total current assets ( £420 )

Prepayments and accrued income ( ____ £)
Creditors: amounts falling due within one year (Normally negative) ( ____ £)

Net current assets ( £420 )
Total assets less current liabilities (£421)

Creditors: amounts falling due aftermore than one year (Normally negative) ( __-1000__ £) (Dirctors Loan)
Provisions for liabilities and charges (Normally negative) ( ____ £)
Accruals and deferred income(Normally negative) ( ____ £)
Total net assets (liabilities) (-£579)

Capital and reserves
Called up share capital (£1)
Share premium account ( ____ £)
Revaluation reserve ( ____ £)
Other reserves ( ____ £)
Profit and loss account (-£580)
Shareholders funds ( -£579 )

 

[emily.hyland]

Hello I have had a look through it and a few things to point out firstly:

1) I see you have share capital of £1 however your directors loan is still £1000. Should your directors loan not be £999? You owe the company £1 for your share

2) Also why is your net assets £421, what are your current liabilities? this should all balance you dont say where your £1 liability is? You balance sheet wil balance is you have net assets at £420 and your directors loan account at £999,

3) The fact that you planned to put in £10k and only put in £1k does not matter. If should only be on the balance sheet if you physically transferred it to the business bank account.

Thanks

Emily

 

[Scalloway]

If you have made a loss your corporation tax will be zero.

 

[MyAccountantOnline]

1) I see you have share capital of £1 however your directors loan is still £1000. Should your directors loan not be £999? You owe the company £1 for your share

That's shown as called up share capital not paid so it has been accounted for.

2) Also why is your net assets £421

That's the cash at bank of £420 plus the £1 share

 

[MyAccountantOnline]

Morning Bird were all of the £700 expenses allowable costs for tax purposes, and did the company have any stock, debtors or creditors at the end of the year in addition to those shown?

The CT figure of minus £116 isnt due or repayable unless the company had profits b/f if so it would be the tax repayable assuming the loss of £580 was a loss for tax purposes - it's £580 @ 20%.

 

[Karimbo]

If you have made a loss your corporation tax will be zero.

do losses carry forward onto next years p&l and reduce CT liability on next years profits or does the profit for CT treatment start off on a clean slate after the loss making year??

 

[MyAccountantOnline]

do losses carry forward onto next years p&l and reduce CT liability on next years profits ....

Yes if not used they do.

 

[morningbird]

If you have made a loss your corporation tax will be zero.

Thank you for your reply, Scalloway. Should the 'Zero' tax be practically put on record as £0 or left it in Profit and Loss Account mathematically as -£116 ?

 

[morningbird]

Morning Bird were all of the £700 expenses allowable costs for tax purposes, and did the company have any stock, debtors or creditors at the end of the year in addition to those shown?

The CT figure of minus £116 isnt due or repayable unless the company had profits b/f if so it would be the tax repayable assuming the loss of £580 was a loss for tax purposes - it's £580 @ 20%.

Hey MyAccountantOnline Nic, thanks very much for your questions which kindly remind me of this matter. Yes, I think I carefully made those expenses only for tax purposes, and apart from what I've listed above, the company during its first year had no other stock, debtors or creditors.

There's a brief list of expenses: Materials purchase, Postage, Office rental, Website, Printing Stuff, Admins. Ermm, that's it. Are these all allowable costs?

Further question: if the company positively was growth towards, at the end of the second year, it gives a profit in P&L £800 before tax, then how much the CT is due to pay?

 

[MyAccountantOnline]

There's a brief list of expenses: Materials purchase, Postage, Office rental, Website, Printing Stuff, Admins. Ermm, that's it. Are these all allowable costs?

Costs such as stock purchased for resale is allowable but without going through the costs in detail and seeing exactly what you have in admin costs I cant say for sure.

....if the company positively was growth towards, at the end of the second year, it gives a profit in P&L £800 before tax, then how much the CT is due to pay?

If thats a tax adjusted profit ie with all disallowable costs added and adjustment made for items not in the P&L eg capital allowances etc, you have a loss b/f of £116 and CT rates are 20% - £136.80

 

[morningbird]

Costs such as stock purchased for resale is allowable but without going through the costs in detail and seeing exactly what you have in admin costs I cant say for sure.

Thank you very much for your reply and patience!

Refer to Stock, I'm just thinking what if the goods are pre-owned?

I suddenly realize that some costs should be counted as Intangible Assets? Such like Website Domain purchase, Trademark Registration Fee, Patent Registration Fee. In addition, each of them has own certain renewal period. Seems all is going more complicated than I thought.

Then the question arises: What value of Intangible Assets should I put on Balance sheet? Will be the sum of actual costs or a subjective value set by myself as long as it sounds sensible? For example, the domain purchase costs £50, Trademark £100, Patent £200, should I put on record as Intangible Assets £350, or other value ?

If thats a tax adjusted profit ie with all disallowable costs added and adjustment made for items not in the P&L eg capital allowances etc, you have a loss b/f of £116 and CT rates are 20% - £136.80

Apologies, I still do not get it. Could you give a further explanation? Much appreciated!

 

[UK Contractor Accountant]

If thats a tax adjusted profit ie with all disallowable costs added and adjustment made for items not in the P&L eg capital allowances etc, you have a loss b/f of £116 and CT rates are 20% - £136.80

No - the loss b/fwd is £580

 

[MyAccountantOnline]

No - the loss b/fwd is £580

Thank you my mistake.

 

[MyAccountantOnline]

Thank you very much for your reply and patience!

Refer to Stock, I'm just thinking what if the goods are pre-owned?

I suddenly realize that some costs should be counted as Intangible Assets? Such like Website Domain purchase, Trademark Registration Fee, Patent Registration Fee. In addition, each of them has own certain renewal period. Seems all is going more complicated than I thought.

Then the question arises: What value of Intangible Assets should I put on Balance sheet? Will be the sum of actual costs or a subjective value set by myself as long as it sounds sensible? For example, the domain purchase costs £50, Trademark £100, Patent £200, should I put on record as Intangible Assets £350, or other value ?




Apologies, I still do not get it. Could you give a further explanation? Much appreciated!

I think you possibly have a few too many questions to answer fully on a public forum but to briefly answer each -

1. The stock purchased can be new or 'pre-owned' - it's still allowable if it's payments of stock for re-sale.

2. Intangible assets go on the balance sheet at the cost price.

3. I suspect I may have confused you when I picked up the incorrect loss figure. If not which bit is it you are struggling with?