Guide to Basic Corporation Tax Filing on Gov Gateway (HMRC)

[Martin Winlow]

Hi,

I have a small private limited company that imports electrical components from China (mostly) and sells assembled items in the UK, Europe and the rest of the world (in order of sales volume). The vast majority of my financial transactions are done through Paypal but I also have a business bank account mainly for dealing with buying goods from China.

The company is a 'micro entity' and therefore does not require audited accounts.

I am the company's sole employee and the company is too small to be VAT registered.

I decided to incorporate my company purely for reasons of limiting personal liability due to the nature of the items I sell (potentially very dangerous if mis-used).

I am looking for a guide (ideally computer-based) to completing my company's corporation tax return using HMRCs Government Gateway.

My 'profits' are not sufficient to warrant employing an accountant at the best part of £1k annually. I cannot believe it is that hard to complete HMRCs system quickly and correctly given my company's very basic set up but I managed to completely fluff up my first years submission - ending up paying a few hundred pounds in tax on zero profit. This was probably mostly down to, as usual, leaving it until the last minute! I am sure I made a basic mistake somewhere but the problem is mainly unfamiliar terminology that will probably never become familiar given that it only gets visited once a year. The Gateway's help screens are woefully inadequate, in my view.

All the software and on-line accountancy packages that appear to offer what I need are geared up for payroll and VAT complications which I do not need and therefore do not want to pay for. However, if one of these is going to be the simplest way of achieving what I want then I am prepared to bite the bullet and pay for it... but which one?

Thank you. Martin Winlow.

 

[Scalloway]

My 'profits' are not sufficient to warrant employing an accountant at the best part of £1k annually. I cannot believe it is that hard to complete HMRCs system quickly and correctly given my company's very basic set up but I managed to completely fluff up my first years submission - ending up paying a few hundred pounds in tax on zero profit. This was probably mostly down to, as usual, leaving it until the last minute! I am sure I made a basic mistake somewhere but the problem is mainly unfamiliar terminology that will probably never become familiar given that it only gets visited once a year. The Gateway's help screens are woefully inadequate, in my view.

A case of buy cheap, pay dear

There is some information here

http://www.mercia-group.co.uk/Downloads/Micro-entities Q and A and sample accounts.pdf

http://www.icaew.com/-/media/corpor...icro-entities-accounting-exemptions-faqs.ashx

https://www.gov.uk/topic/business-tax/corporation-tax

All the software and on-line accountancy packages that appear to offer what I need are geared up for payroll and VAT complications which I do not need and therefore do not want to pay for. However, if one of these is going to be the simplest way of achieving what I want then I am prepared to bite the bullet and pay for it... but which one?

Accounting software will put your accounts in an form that will enable you to fill in the correct figures. If you want free VT cashbook is regularly recommended here. I use it myself for my own small ltd.

http://www.vtsoftware.co.uk/cashbook/

If you want online Wave is used by some posters here.

https://www.waveapps.com/

 

[Martin Winlow]

Hi Scalloway. Thank you taking the trouble to respond.

I have had a look through the links you provided and I am happy that my company fits the 'micro entity' category. The accounts side is pretty straight forward following the the Gateway through so I'm not too worried about that.

As for the corporation tax (CT) side of things, I looked at both VTsoftware and waveapps and it appears that I will be doing a large amount of repetition of data entry given that I already keep a pretty comprehensive spreadsheet for transactions. So, I am back to trying to just get a simple guide to work through the Gateway's system and help on what goes where.

Even my assets set up is very basic as I require very little in the way of them given that I work from home (and garage) and that they consist of a basic hand tools, a battery powered crimping tool and an inkjet printer.

But thanks anyway.

 

[Glenn Martin]

Are you sure your profit is Zero? Or have you included capital expenses in your figures.

The problem with looking on google for help is much that is quoted is opinion and not fact.
Why dont you look at someone who will do a filing only service for you.

If you are buying stuff to sell but not making any profit despite having little to know cost base you maybe should look at your business model, as if you costed in your time where is the benefit of what you doing.

With regards software many have a light version which does not have payroll or vat involved and if you were using the software you would not to also maintain spreadsheets so would be little to duplication.

If you are dead set on doing it yourself have a look at Taxfiler you could enter your figures into a trial balance, then it would produce accounts and tax returns in a format that could be submit to HMRC and Co House. I think they have a subscription for one off submissions such as this.

 

[Martin Winlow]

Hi Glenn,

My 'null profit' position is based on the fact that I have to buy in bulk from China to get a half decent price for my 'bits' and consequently have paid out considerably more than I have taken in during the first year. The situation improved considerably some months ago and my profit is now well +ve, I am pleased to say. TBH, I am not really interested in making a killing as I retired from my 30 year 'career' 6 months back and with the business as it is I can enjoy having half the day or more more to mess about with my many and varied interests whilst still supplement my meagre pension. Hence my reluctance to fork out for an accountant. I am, of course, also interested in learning how to do it properly and minimising my tax payment - hence my interest in some form of computer-based set up. My main concern is to not fall foul of HMRC.

I will take a look at Taxfiler and if you have a any specific suggestions for lite versions of the mainstream apps, I am all ears.

Thanks for your help.

 

[ffox]

I cannot believe it is that hard to complete HMRCs system quickly and correctly given my company's very basic set up but I managed to completely fluff up my first years submission - ending up paying a few hundred pounds in tax on zero profit.

Were you using the HMRC downloadable PDF CT600 form for your first year submission? If so, you have my sympathy.
Have you tried the new HMRC on-line forms? They are much more user friendly and, if the tax figure they come up with doesn't seem right, you can abandon the forms and seek professional advice.
The new on-line system is very simple and logical to follow through and the help pages are quite informative.

 

[STDFR33]

Hi Glenn,

My 'null profit' position is based on the fact that I have to buy in bulk from China to get a half decent price for my 'bits' and consequently have paid out considerably more than I have taken in during the first year. The situation improved considerably some months ago and my profit is now well +ve, I am pleased to say. TBH, I am not really interested in making a killing as I retired from my 30 year 'career' 6 months back and with the business as it is I can enjoy having half the day or more more to mess about with my many and varied interests whilst still supplement my meagre pension. Hence my reluctance to fork out for an accountant. I am, of course, also interested in learning how to do it properly and minimising my tax payment - hence my interest in some form of computer-based set up. My main concern is to not fall foul of HMRC.

I will take a look at Taxfiler and if you have a any specific suggestions for lite versions of the mainstream apps, I am all ears.

Thanks for your help.

Sounds like you haven't accounted for closing stock.
Once you make the necessary accounting adjustments, you'll probably show a profit.

 

[Glenn Martin]

I was thinking stock may not have been taking into account, as if you are buying something and selling it for more than you have paid and have no costs you should surely make some money.

If you look at Quickbooks, Xero or Sageone they all have cash book versions of the software which are available for a few quid per month. (The Xero ones maybe only available via an accountant).

The forms are fairly easy to fill on HMRC site unsure over what issues you are having or what help a guide will give you. You enter your sales, purchases and expenses figures where it asks then cash at bank etc so cannot see how you could go wrong.

If it doesn't balance it is because you are entering random figures and not a balanced set of accounts.

 

[MyAccountantOnline]

Hi,

I have a small private limited company ...

The company is a 'micro entity' and therefore does not require audited accounts.

I am the company's sole employee and the company is too small to be VAT registered.

..
My 'profits' are not sufficient to warrant employing an accountant at the best part of £1k annually. ....

Martin based on the above if you've kept some decent accounting records you can get a good accountant to prepare the year end accounts and tax return for ALOT less than £1,000 saving you a lot of hassle and time too.