First year's accounts Ltd company - what should I send to book keeper?

[the white rose]

My Ltd company was formed in August 2008 and I am preparing to send information to my book keeper for the first tax return. She did give me a prep talk last year on what to send but I'm still very confused and want to try and pay her the respect of at least having an idea what I'm doing before I send in everything under the sun in my office - also I'm trying to keep costs down and will be paying by the hour for their time.

I don't yet have a visa card relating to my business account, something I'm planning to rectify, so quite a few payments relating to the business have been made via my credit card as many online payments require visa. So will the book keeper require print offs of all my credit card statements dating back to August 2008? I'm assuming yes.

Also some payments for the business have been made through my husband's Paypal account - are print offs from that account relevant?

And would I be better paying a flat fee for an annual return rather than paying them by the hour? Because if I send them irrelevant information (like dozens of bus tickets) then I will have to pay for them sorting them out! Or, considering the business is small, should I just use software like KashFlow and do it myself?

 

[DuaneJackson]

A bookkeeper would usually be the one keeping the records. And an accountant then does the tax retruns based on those records.

Using KashFlow would elimiate the need for a bookkeeper, but not an accountant.

If you use KashFlow then set up two additional bank accounts:

"Directors Loan - your name"
and
"Directors Loan - husbands name"

Any purchases you pay for using your own card or your husbands paypal account, record in the usual way (under the Purchases tab), but when you mark them as paid, just select pne of the above bank accounts.

 

[the white rose]

A bookkeeper would usually be the one keeping the records. And an accountant then does the tax retruns based on those records.

After reading loads and posting on a few threads on here when I set up the business, I came to the conclusion that I didn't need an accountant at this stage.

Thanks for the advice re KashFlow - I think I'll try their free trial just to get my head around this. However if I choose to use KashFlow in future wouldn't I have to have the accounts certified by an accountant before submitting them to companies house?

And if I'm submitting material for my book keeper right now, then do I still submit print offs from Paypal and my credit card account? Will the book keeper be putting that information in two director's loan accounts then? Should I ask the book keeper if that's what they'll be doing?

 

[Williams lester]

Will the bookkeeper be producing abbreviated accounts, plus full accounts, CT600 corporation tax return and associated computations?

 

[Blackberry]

I would talk to your bookkeeper and confirm exactly what services they are providing for you - you might find you'll need an accountant as well as many bookkeepers don't offer year end accountancy services and tax return services

 

[elaine@cheapaccounting]

Well the more you do the less the costs will be. My advice would be to write down what you want your bookkeeper or accountant to do - i.e. agree a terms of reference.

For a limited company you need to do the following:

An Annual Return

This is a snap shot of information about the Company at a point in time eg. who are the shareholders, directors etc. This if often confused with the accounts but is very different.
This must be filed at Companies House along with a fee of £15 if electronic or £30 if paper.
Annual Accounts

Although Companies House only require an abbreviated set of accounts to be filed, which look easy to prepare, HMRC do require a full set of accounts including a detailed profit and loss account and directors report.
Companies House and HMRC are very different government departments and do not work together. So do not assume that just because you have filed some with one of them, the other gets it as well.
CT 600 Corporation Tax Return

Along with the full set of accounts, HMRC will require a CT 600 to be completed.
This is not a straight forward form and, unless you have experience, it is best left to professionals to complete.
Annual Self Assessment

Regardless of how much they earn, each director of the Company may have to complete a self assessment which should show all of their income from every source, not just from the company.
Annual Employer Returns

Any business which employs staff has a number of reporting requirements eg. P35, P14, P11D etc.
Quarterly VAT Returns

Any business, not just companies, whose turnover exceeds VAT threshold in the previous 12 months has to register and account for VAT. The biggest mistake made here is assuming that the need to register relates to the accounting year rather than the previous 12 months from the current date.
Registering for VAT means the completion of a quarterly VAT return. This is due at the end of the month following the quarter end date. So it is essential that the accounts are kept up to date so that this can be completed on time.



Some may not be applicable to you.


What can you do yourself?


What do you want someone else to do?


Is you bookkeeper able to do the Co Accounts and CT600 plus tax comp?

 

[MyAccountantOnline]

My Ltd company was formed in August 2008 and I am preparing to send information to my book keeper for the first tax return.

With respect it sounds to me like your bookkeeper is doing more than is usual if they are doing a tax return as well. Bookkeepers wouldnt normally be preparing tax returns - thats an accountants job.

And would I be better paying a flat fee for an annual return rather than paying them by the hour?

Its your choice as the client - I run an accountancy practice and I took the decision long ago to charge fixed fees agreed in advance for accounts and tax return work which I now my clients are very happy about.

When I am buying a service I really dont want the uncertainty of paying by the hour and the worry of a huge unexpected bill and dont want my clients feeling the same.

 

[Jenni384]

Some bookkeepers will do tax returns for individuals. However I'd be surprised to see a bookkeeper offering accountancy and taxation for a Ltd Co - it's much more complex.

Broadly speaking, plugging in all your data is a bookkeeper's job and is often charged by the hour (broadly £10-30 per hour depending on location, experience, qualifications etc), or per transaction, or priced per job as long as they know what volume of work the job will entail.

Keeping your records in an orderly fashion is not the same as bookkeeping - which is translating the data into the correct accounting format. So, if you were to enter your data into software such as KashFlow, Solar Accounts or similar, as long as it's entered correctly, you will be saving costs on bookkeeping.

Turning the books into a set of accounts in statutory format with the related notes, tax computations and company tax return is a separate task and is usually undertaken by an accountant. If your bookkeeper is doing this, please check that they have the necessary qualifcations and experience for Ltd Co work as it's very different to sole traders. As others have said, you may need to talk to an accountant about this, as a bookkeeper may only (and usually does) work up to trial balance

Get a quote up front and, if it's an hourly rate, get an estimate of hours and ask them to let you know if it looks like it's going to go over the estimate. Most accountants these days will quote a fixed fee for company work.

 

[the white rose]

Thanks Williams Lester - the answer is, no idea. I will ring them. Thanks Blackberry, ditto, I'll ring them.

Thanks elainec100 that is extremely helpful. I need to talk to the book keeper and find out exactly what they're going to be doing. When I last asked them what they needed they just said "Send everything. We'll sort it out." I need more information, obviously.

I'll get onto this and come back next week and let you know how I got on...

 

[the white rose]

When I am buying a service I really dont want the uncertainty of paying by the hour and the worry of a huge unexpected bill and dont want my clients feeling the same.

I agree with you entirely. I'm very unhappy about the idea of paying by the hour for this...

 

[Williams lester]

Also worth checking that the bookkeeper has PII which covers them to do this sort of work.

 

[Williams lester]

I agree with you entirely. I'm very unhappy about the idea of paying by the hour for this...

In which case you should be asking them for a fixed fee quote or moving the work to someone who will give you a fixed fee quote.

 

[the white rose]

Hi Jenni and thanks. I had no idea how little I knew about all this until now. At least I know a few questions to check with the book keeper before I proceed...

 

[the white rose]

Also worth checking that the bookkeeper has PII which covers them to do this sort of work.

OK, thanks, I'm going to make a list of questions and send them by email I think...

 

[elaine@cheapaccounting]

If you don't control a supplier they control you.

This applies to accountants and bookkeepers as well.

A terms of reference should be agreed with a price for the work.

We see many cases on here where there is a surprise when the fee arrives!

I am sure with all the posts here you will get everything under control now.

 

[Wild Goose]

White Rose, I'm working on a job right now where the bookkeeper fouled up last year: cost the client in fines plus missed tax-savings. Limited company accounts are a bit more involved than sole-traders' - so unless your bookkeeper really knows the ropes I'd stick to an old hand accountant for limited company accounts.

Elaine's right about negotiating being a two-sided affair: Son #2 just had his babe-magnet Polo bonnet sprayed; and because he knocked-down the price the paint-shop guy didn't bother rubbing it down (so the paint's chippin' off already!). Just list what you want ("books tidying, accounts, corporation tax return, abbreviated a/c's for Cos House, and anything else that comes up first year") and let accountants quote you on that basis with a fixed price they're happy with. My philosophy is never shave anyone's price, or they'll cut corners.

 

[IanBrewster]

Never forget that when you agree a fixed price with a supplier, whether it is a builder, bookkeeper or accountant, you are transferring risk to them.

If your supplier is properly pricing in that risk, then you will, on average, pay more than if you were paying by the hour.

You may get some certainty on the final cost, but the supplier still has to make money.

 

[Wild Goose]

Never forget that when you agree a fixed price with a supplier, whether it is a builder, bookkeeper or accountant, you are transferring risk to them.

I can't remember all that! Least rate, not for ever!! Bet you a million quid I've forgotten it by going home time.

 

[the white rose]

If you don't control a supplier they control you.

Amen to that. Wise words. Someone's got to be holding the ropes...

Son #2 just had his babe-magnet Polo bonnet sprayed;

LOL at the description

Just list what you want ("books tidying, accounts, corporation tax return, abbreviated a/c's for Cos House, and anything else that comes up first year") and let accountants quote you on that basis with a fixed price they're happy with.

This sounds like sound advice in a nutshell. I've been feeling very uncomfortable with the "Just send us everything, we'll sort it out then charge you hourly" approach. It may be completely fair, but if I feel confused and out of my depth, then something is wrong. I sometimes think it's wise to put your hand up and say "I don't know what I'm doing here, I need to know all the ins and outs." rather than pretend you know what you're doing in order not to look ignorant.

Never forget that when you agree a fixed price with a supplier, whether it is a builder, bookkeeper or accountant, you are transferring risk to them.

I had a very unfortunate incident recently when I paid a computer techy an hourly rate to sort out our PC. I ended up being charged for time when he was quizzing me about my publishing company. Needless to say I only paid him for the time he was attempting to fix the computer. A feat he failed to achieve, but I still had to pay him for his time. I feel more comfortable with fixed rates.

 

[Jenni384]

Fixed fees are great. Customer knows what they will pay, supplier knows what they will earn, nice and simple!

As long as the scope of the job is clear beforehand, fixed fees are the way to go!

I certainly wouldn't like the "Just send us everything, we'll sort it out then charge you hourly" approach.

 

[accountancyextra]

Fixed fees are great. Customer knows what they will pay, supplier knows what they will earn, nice and simple!

As long as the scope of the job is clear beforehand, fixed fees are the way to go!

I certainly wouldn't like the "Just send us everything, we'll sort it out then charge you hourly" approach.

Completely agree with that Jenni. The important factor is to agree the scope of the job and what state you'll be receiveing the records in and then document it - then there is no confusion for either the customer or supplier. I have seen occassions where the price for the job has been agreed on reconciled books, with supporting info filed in lever arch files and the job arrive in various carrier bags with envelopes unopened and no reconciled books.

 

[Wild Goose]

This sounds like sound advice in a nutshell. I've been feeling very uncomfortable with the "Just send us everything, we'll sort it out then charge you hourly" approach. It may be completely fair, but if I feel confused and out of my depth, then something is wrong. I sometimes think it's wise to put your hand up and say "I don't know what I'm doing here, I need to know all the ins and outs." rather than pretend you know what you're doing in order not to look ignorant.

I'll let you into a secret - accountants don't make much - sometimes lose money - on a new client first year they're signed on. It's a medium/long term investment where one makes a profit year 2 onwards. First year is all about gettin' to know your business and gettin' you on the right tax-track and pastin' over any other cracks. Sortin' a few messy records is neither here nor there yr1. Just say you want ner woche, and there'll still be plenty of first-year bidders.

I had a very unfortunate incident recently when I paid a computer techy an hourly rate to sort out our PC. I ended up being charged for time when he was quizzing me about my publishing company. Needless to say I only paid him for the time he was attempting to fix the computer. A feat he failed to achieve, but I still had to pay him for his time. I feel more comfortable with fixed rates.

Ouch! Get your own back by selling him one of your books!! They'd make great Chrissie Prezzies - Your's Truly is already droppin' hints!

Fixed fees are great. Customer knows what they will pay, supplier knows what they will earn, nice and simple!

Hmm, J you've been studyin' "The Professional's Guide To Value Pricing", have you not? "Customers", not "clients"; Fixed fees are wunderbar! I take it you're a fully-fledged disciple?

 

[the white rose]

Fixed fees are great. Customer knows what they will pay, supplier knows what they will earn, nice and simple!

As long as the scope of the job is clear beforehand, fixed fees are the way to go!

I certainly wouldn't like the "Just send us everything, we'll sort it out then charge you hourly" approach.

I think I'm going to go down the route of doing my (very basic and simple) books myself using KashFlow then sending the reports off to an accountant.

I've approached the book keeper asking if they can do a fixed rate and they've deliberately avoided answering the question, just saying it is urgent I send them all the documents to get my self-assessment completed on time. I already asked for a deadline date, another question they've avoided answering directly (this avoidance of answering questions directly is further making me very comfortable!) My company was formed on the 27th August 2008 so I'm presuming self-assessment has to in by 31st Jan 2010 which gives me adequate time to learn KashFlow and prepare the first year's books then submit to an accountant, surely?

Ouch! Get your own back by selling him one of your books!! They'd make great Chrissie Prezzies - Your's Truly is already droppin' hints!

You mean my book Mother-in-Law, Son-in-Law I presume? Women do seem to love that book, it's true

(Note to mods - I will resume subscription in the New Year to get my sig back!)

 

[MyAccountantOnline]

self-assessment has to in by 31st Jan 2010 which gives me adequate time to learn KashFlow and prepare the first year's books then submit to an accountant, surely?

It's not impossible but it is pushing it!

Most accountants will be very busy in January and some wont take on new clients at this time of year.

You also need to bear in mind when an accountant takes on a new client (assuming you use a qualified accountant) they have to deal with various formalities first - ie obtaining proof of ID, issuing a letter of engagement and even if you use a firm like mine that does most of this online it still takes time. The accountant also has to obtain handover information from a former agent and again this takes time.

I wouldnt leave it any longer if I were you.

 

[elaine@cheapaccounting]

Your self assessment is due by 31/01 if you have to complete one.

But I think you said you had a limited company - you need to find the year end out from Co House for this.

Not the same dead lines as for the SA.

 

[Wild Goose]

My company was formed on the 27th August 2008 so I'm presuming self-assessment has to in by 31st Jan 2010 which gives me adequate time to learn KashFlow and prepare the first year's books then submit to an accountant, surely?

White Rose, your limited company's accounts are not due for submission at Companies House until 27th May 2010; even later for HMRC.

I think your bookkeepers / accountants are havin' a laugh with you.

It's true your personal self-assessment tax return is due for submission by the end of January - but all that should be needed for that is the figure for any wages and/or dividends that you received in tax year 2008-09 (runs 6/4/08 until 5/4/09, so might include wages from whatever you were doing prior to FDLP Ltd between April and August 2008)

Hope this gets you on the right track.

You mean my book Mother-in-Law, Son-in-Law I presume? Women do seem to love that book, it's true

Eeek! I'm a bloke!! :redface:
I guess it'll bring out my feminine side

Late Edit: Overlap with The Red Rose - apologies Elaine

 

[the white rose]

I wouldnt leave it any longer if I were you.

Cheers Nicola HJ

White Rose, your limited company's accounts are not due for submission at Companies House until 27th May 2010; even later for HMRC.

All this is useful, thanks Wild Goose. I just got married last week and organising the wedding has taken a huge chunk out of my life recently (which is why I put it off for 8 years in the first place to be honest.) So sorting out this accountancy / book keeping issue has been continually pushed back for a few weeks. I'm going to get on the case now.

Eeek! I'm a bloke!! :redface:
I guess it'll bring out my feminine side

I know, LOL When you said "Yours truly" I thought you meant "Her indoors". Blokes love it too

 

[Wild Goose]

All this is useful, thanks Wild Goose. I just got married last week and organising the wedding has taken a huge chunk out of my life recently (which is why I put it off for 8 years in the first place to be honest.) So sorting out this accountancy / book keeping issue has been continually pushed back for a few weeks. I'm going to get on the case now.

Many Congrats.. I saw on your website blog that bells were a'ringin'. I guess an eight year engagement would make a good book subject

If you want confirmation of when your accounts are due just google "Companies House Webcheck" (without the quotes, silly) and type in the name of your company - you'll get a list of basic information & due dates for accounts, annual return etc.

There's only one important document that you should have got to HMRC at this stage, and that's form CT41g to tell them you started trading - if you don't tell them within 3 months of starting to trade the fine kicks off @ £300 and can rise to £60 day in the worst instances (rare - you, or your agents, have to be totally soft to get landed with that). Make sure you get the start date right, as there's a fine of up to £3k for negligent or fraudulent misinformation. Thought I'd mention that form as your bookkeepers / accountants don't sound very on-the-ball.

I know, LOL When you said "Yours truly" I thought you meant "Her indoors".

Ahha... she once was a true love of mine.

 

[the white rose]

Many Congrats.. I saw on your website blog that bells were a'ringin'. I guess an eight year engagement would make a good book subject

I wrote it. It's published. It's called My Adventures in Cyberspace and is the story of how we met. I'm half way through writing the sequel to be published next year.

If you want confirmation of when your accounts are due just google "Companies House Webcheck" (without the quotes, silly) and type in the name of your company - you'll get a list of basic information & due dates for accounts, annual return etc.

Thanks. Annual return is done, did the HMRC starting trading one last year.

I think I can sort this out now so thanks everyone for your advice. It's tempting to stay around and socialise like I did last year and I'll try to come on more often for a bit of banter in 2010! X