First Company return help....

Discussion in 'Accounts & Finance' started by THE_SPANNER, Apr 14, 2019.

  1. THE_SPANNER

    THE_SPANNER UKBF Contributor Free Member

    43 1
    Good Morning,

    I have 2 queries and any help will be much appreciated.

    My first company return (micro-entity) is due which I thought wouldn't be too difficult due to a simple structure and low transaction volume. I was wrong!
    Can anyone help me on how to construct the required amounts for entry into the online micro-entity submission page.
    Also, am I right in thinking the company tax payment is just Net Profit for the year * 19% (2017/18) - then submitting the simplified return (CT600 (Short)) for a micro-entity?

    My Balance Sheet:
    VAT charged from suppliers: 23.02 - (outstanding input VAT to claim)
    CASH at bank: 9112.72
    Total Assets: 9135.74

    VAT owed to HMRC: 23.25 - (slight miscalculation on VAT return which I need to submit adj)
    Wages owed to employees: (7480) - (1 employee, monthly amount below tax & NI thresholds)
    Amount owed to suppliers: 122.18 - (this is actually paid but posting was done beyond period)
    Total Liabilities: (7334.57)

    Assets - Liabilities: 16470.31


    Shares: ? (I have 10*£1 no idea if paid/unpaid -accountancy service setup my co all inc in 1st fee)
    Dividends: (7000.00) - (5k in 2017/18 & 2k in 2018/2019 tax years tax free allowance drawn out)
    Profit & Loss Account: 23470.31
    -------------------------
    16470.31
    -------------------------

    I vowed to do this myself after my 'premium' accountancy service was everything but that.

    Thank you,

    Mark
     
    Posted: Apr 14, 2019 By: THE_SPANNER Member since: Mar 16, 2019
    #1
  2. Scalloway

    Scalloway UKBF Legend Free Member

    14,911 3,165
    Have you used software to keep the company books?
     
    Posted: Apr 14, 2019 By: Scalloway Member since: Jun 6, 2010
    #2
  3. THE_SPANNER

    THE_SPANNER UKBF Contributor Free Member

    43 1
    Yes, after terminating my accountancy service I tried Pandle.
    I had to re-enter my data as the export provided to me from my ex-accountancy service was limited - they said they couldn't provide VAT submission info at all :eek:
     
    Posted: Apr 14, 2019 By: THE_SPANNER Member since: Mar 16, 2019
    #3
  4. Scalloway

    Scalloway UKBF Legend Free Member

    14,911 3,165
    Pandle has a Balance Sheet report. Have you taken the figures from there? The reason I ask is that you have added liabilities to assets which is not what I would expect.
     
    Posted: Apr 14, 2019 By: Scalloway Member since: Jun 6, 2010
    #4
  5. THE_SPANNER

    THE_SPANNER UKBF Contributor Free Member

    43 1
    Yes, the figures in my posting are as per the B/S report - I just added in 'Shares' because it is the first field in the Companies House online submission form.

    Well that's a bit worrying - is it an input error on my part?
    I started with zero opening balances.
    I setup 3 suppliers: Accountancy service & Phone Service & Bank (for charges)
    I setup 1 customer.
    I entered invoices issued & received.
    I imported my bank transactions from csv export file. (I only have like 85 transactions)
    I matched off payments & receipts against invoices and 1 HMRC duplicate payment refund.
    The quarterly VAT returns Pandle generated match the past returns & payments - I entered a journal to adjust for the outstanding calculation error which is due to be paid.
    The bank balances match.

    Should I try a different system?

    Thanks,
     
    Posted: Apr 14, 2019 By: THE_SPANNER Member since: Mar 16, 2019
    #5
  6. Jaydee

    Jaydee UKBF Enthusiast Free Member

    1,042 272
    You have entered the wages owed to employees as a negative number and yet the amounts owed to HMRC and other suppliers as positive.

    As the negative liabilities (i.e assets) have improved your balance sheet value then I assume that positive entries in this section do denote liabilities.

    This would mean that the (7,480) actually means that you have overpaid your employee (presumably you?) not underpaid - which would of course be odd.

    Maybe you need to enter 7,480 here and not (7,480) but then there would be a circa £15k swing in your profit and loss account - so maybe the start point is to look at whether a profit figure of £23,470 makes sense or is that just a balancing figure to make your balance sheet balance?
     
    Posted: Apr 14, 2019 By: Jaydee Member since: May 27, 2007
    #6
  7. NicoJ

    NicoJ UKBF Contributor Free Member

    98 13
    Looks to me like the employee wages is a debit which would then balance. Maybe this should be in the p&l rather than the balance sheet at a guess?

    I think your profit is overstated by 7480.
     
    Posted: Apr 14, 2019 By: NicoJ Member since: Mar 27, 2017
    #7
  8. THE_SPANNER

    THE_SPANNER UKBF Contributor Free Member

    43 1
    Hello Jaydee & NicoJ,

    Thanks for your replies. All I did was followed some guides and clicked buttons.
    Yes this was my foray into consulting and I was the sole employee.
    You're both absolutely right I have NOT made a net profit of £23.4k!!! (on sales of £24.5k - I wish I had though).
    I'm such a pleb I didn't spot this :rolleyes:

    Yes looks like the wages of 7480 have not been expensed anywhere - I tagged the payments on bank transaction import to 'wages' and thought Pandle would do the necessary.

    There is a 'Total Wages' expense account but it's not available in the selection box - anyone know the correct way of posting wages/salary on Pandle?
    Bearing in mind there is no Income Tax or NI element as each monthly payment was belown the threshold amounts.

    Thanks,
     
    Posted: Apr 14, 2019 By: THE_SPANNER Member since: Mar 16, 2019
    #8
  9. Scalloway

    Scalloway UKBF Legend Free Member

    14,911 3,165
    The employee wages should be a debit to P & L and a credit to creditors. Are you running the payroll through Pandle?
     
    Posted: Apr 14, 2019 By: Scalloway Member since: Jun 6, 2010
    #9
  10. THE_SPANNER

    THE_SPANNER UKBF Contributor Free Member

    43 1
    No, when I took over I was using BPT.

    I have done some wage adjustments and present version 2 of the BS:

    VAT charged from suppliers: 23.02 - (outstanding input VAT to claim)
    CASH at bank: 9112.72
    Total Assets: 9135.74

    VAT owed to HMRC: 23.25 - (slight miscalculation on VAT return which I need to submit adj)
    Amount owed to suppliers: 122.18 - (this is actually paid but posting was done beyond period)
    Total Liabilities: 145.43

    Assets - Liabilities: 8990.31


    Shares: ? (I have 10*£1 no idea if paid/unpaid -accountancy service setup my co all inc in 1st fee)
    Dividends: (7000.00) - (5k in 2017/18 & 2k in 2018/2019 tax years tax free allowance drawn out)
    Profit & Loss Account: 15990.31
    --------------------------------------------------
    Total Capital: 8990.31
    --------------------------------------------------

    Does that look better? :)

    Thanks,

    Mark
     
    Posted: Apr 14, 2019 By: THE_SPANNER Member since: Mar 16, 2019
    #10
  11. Scalloway

    Scalloway UKBF Legend Free Member

    14,911 3,165
    What happened to the wages due to employee not paid? That should appear in creditors.

    Corporation tax should appear as a creditor.
     
    Posted: Apr 14, 2019 By: Scalloway Member since: Jun 6, 2010
    #11
  12. Jaydee

    Jaydee UKBF Enthusiast Free Member

    1,042 272
    Nobody on the forum can know whether the figures are correct.

    Intuitively, it appears that your profit and loss account may still be overstated, given that:
    a) you had no opening balances - so maybe this is year 1?
    b) your sales were £24,500
    c) your salary was £7,480

    So, the maximum that your p+l could be is £17,020 if you had no other costs at all.

    At £15,990 you therefore appear at least to have made no provision for Corporation Tax, and presumably only had £1,030 of overheads/stock purchases etc?
     
    Posted: Apr 14, 2019 By: Jaydee Member since: May 27, 2007
    #12
  13. THE_SPANNER

    THE_SPANNER UKBF Contributor Free Member

    43 1
    I used 'New wages adjustment' and posted each wage amount on the date paid.

    No you're right nobody on a forum can know if its correct or not. I guess the issue is these 'softwares' aren't as easy/simple to use as marketed.

    a. Correct. No opening balances as this is year 1.
    b. Exact sales: £24625.00
    c. Correct - salary taken totals £7480.00. (680pm)

    No provisions for tax as I was planning to get another accountant after getting rid of my 'service' but I experienced a life changing event and 'contracting' ceased after 5 months so I thought I'd do it myself.

    Anyway, the p&l now looks like this:

    Sales: £24625.0
    Difference in flat rate VAT: £148.73
    Total Sales: 24773.73

    Total Wages: £7480.00
    Travel and Subsistence: £201.78
    Telephone Costs: £39.84
    Bank Charges and Interest Paid: £6.80
    Accountancy Fees: £1055.00
    Total Expenses: 8783.42
    --------------------------------------------------
    Net Profit: £15990.31
    --------------------------------------------------

    Can I still add a provision for company tax and if so how best done?

    Thanks,

    Mark
     
    Posted: Apr 14, 2019 By: THE_SPANNER Member since: Mar 16, 2019
    #13
  14. Jaydee

    Jaydee UKBF Enthusiast Free Member

    1,042 272
    Corp Tax at 19% = £3,038 should reduce your profit and increase your creditors in the balance sheet.

    Were you using a flat rate of 15.5% of gross sales?
     
    Posted: Apr 14, 2019 By: Jaydee Member since: May 27, 2007
    #14
  15. THE_SPANNER

    THE_SPANNER UKBF Contributor Free Member

    43 1
    Yes, that's correct my 1st year flat rate is 15.5%.
    Total VAT due to HMRC: £4580.25 - Paid £4557.00 - £23.25 owed to HMRC.

    Don't I post the corp tax amount post Y/E as it's charged against net profit?

    You can tell I've neglected this and it's crept up on me- my Company House accounts filing & Corp Tax payment are due on Wednesday :(
     
    Posted: Apr 14, 2019 By: THE_SPANNER Member since: Mar 16, 2019
    #15
  16. Scalloway

    Scalloway UKBF Legend Free Member

    14,911 3,165
    It's charged on the profits for the year being filed so it belongs in there.
     
    Posted: Apr 14, 2019 By: Scalloway Member since: Jun 6, 2010
    #16
  17. Jaydee

    Jaydee UKBF Enthusiast Free Member

    1,042 272
    1. I cannot see how your FRS profit in your p+l is only £148.73. I would expect it to be VAT charged of £24,625 x 20% = £4,925 less VAT due to HMRC of £4,580.25 = £344.75

    2. The CT goes into these accounts

    3. The CH filing deadline can very easily be moved from Wednesday if you are not ready by then - simply file a shortening of your accounts period by 1 day, but then still file to whatever your year-end date was originally in due course as you can file to +/- 7 days from your year-end.

    4. Very unlikely that your CT payment due date is also Wednesday. If you started trading on the very day that you incorporated then I would expect the first due date to be Thursday and the second due date to be 1st May. If you did not trade at all in the calendar month that you incorporated then the due date will be 1st May. If you do have two due dates then you will need to file two tax returns and pro-rate your profit over the extended period which is a whole new can of worms if you are already struggling!
     
    Posted: Apr 14, 2019 By: Jaydee Member since: May 27, 2007
    #17
  18. THE_SPANNER

    THE_SPANNER UKBF Contributor Free Member

    43 1
    OK, jnl posted DR Corporation Tax (P&L) CR Corporation Tax Owed (B&S) - is a jnl date of 01 July 2018 ok?

    1. Yes I worked that out too. But what about input VAT to be reclaimed - I haven't reclaimed any yet. Is Pandle doing something 'clever' to adjust for the VAT returns which have been input, locked but not submitted? I have submitted my VAT returns online already so don't want to mess anything up by pressing the submit button in Pandle - which presumably posts them?

    2. Done.

    3. OK, but I just want to get this off my shoulders.

    4. Unfortunately it is. I have been sent 2 Notices to deliver Company Tax Return:
    17JUL17 to 16JUL18 - payment due: 17APRIL19 filing due: 16JUL19
    17JUL18 to 31JUL18 - payment due: 01MAY19 filing due: 31JUL19
    I worked these out and double checked with the helpline.
    EDIT: The companies house reminder says: Your accounts for 17 July 2017 to 31 July 2018 are due. To avoid a penalty, we must receive acceptable accounts by 17 April 2019 -

    I don't need any new worms :(
     
    Last edited: Apr 14, 2019
    Posted: Apr 14, 2019 By: THE_SPANNER Member since: Mar 16, 2019
    #18
  19. THE_SPANNER

    THE_SPANNER UKBF Contributor Free Member

    43 1
    New versions:
    P&L
    Sales: £24625.0
    Difference in flat rate VAT: £148.73
    Total Sales: 24773.73

    Total Wages: £7480.00
    Travel and Subsistence: £201.78
    Telephone Costs: £39.84
    Bank Charges and Interest Paid: £6.80
    Accountancy Fees: £1055.00
    Corporation Tax: £3038.00
    Total Expenses: 11821.42
    --------------------------------------------------
    Net Profit: £12952.31
    --------------------------------------------------

    B&S
    VAT charged from suppliers: 23.02
    CASH at bank: 9112.72
    Total Assets: 9135.74
    VAT owed to HMRC: 23.25
    Corporation Tax Owed: 3038.00
    Amount owed to suppliers: 122.18
    Total Liabilities: 3183.43

    Assets - Liabilities: 5952.31


    Shares: ? (I have 10*£1 no idea if paid/unpaid -accountancy service setup my co all inc in 1st fee)
    Dividends: (7000.00)
    Profit & Loss Account: 12952.31
    --------------------------------------------------
    Total Capital: 5952.31
    --------------------------------------------------

    Is Freeagent a better software to try?
     
    Posted: Apr 14, 2019 By: THE_SPANNER Member since: Mar 16, 2019
    #19
  20. Jaydee

    Jaydee UKBF Enthusiast Free Member

    1,042 272
    A journal date within your accounting year is fine.

    1. While on the FRS you are not permitted to reclaim input VAT (ignoring the assets > £2,000 rule, as you appear to have none) and so I fear that your FRS profit and/or your submitted returns may be wrong.

    4. Did you actually commence trade during July 2017 or was there a dormant period? If you did, then you will need to file two tax returns. If not then you can file one only to July 2018.

    As an aside, if you registered for VAT with effect from some date in July 2017 then your FRS 1% discount would have expired during July 2018 and so some of your sales in this accounting period may be at 16.5% flat rate rather than 15.5%.
     
    Posted: Apr 15, 2019 By: Jaydee Member since: May 27, 2007
    #20