With all these posts about Accountants...

[Bluebird]

Its made me think perhaps I should do the monthly things myslef and just get somebody to do the end-of-year-thing - it's not just cost, I'd like to be able to do it anyway [ or my spouse will for the market rate come April 2008 ].

Am I right in thinking that the general rules are:

1. From the Invoice Total [ inc VAT ] deduct the VAT due [ FRS ] and put into pot.
2. Next Calculate the salary I want to take [ net ] and calculate the PAYE and put into pot.
3. Calculate "profit" by subtracting the VAT due, PAYE due, Salary being Paid and ALL other "Business Expenses"
4. Determine Corp Tax based on current rate [ 19% ] and put into Pot.
5. Whatever is left can be distributed as Dividend or held in Company Bank A/c

Put all "pot" funds into High Interest a/c.

From that I'll pay the PAYE & VAT online [ which I do currently anyway ] as well as the CT when it becomes due.

Any potential flaws in the above ?

Thanks

[NotAllThere]

Looks reasonable to me, but then, IANAA. But you've missed of, e.g. asset depreciation.

Really, you should do double entry book-keeping and regularly calculate a P&L.

[r0bly0ns]

4. Determine Corp Tax based on current rate [ 19% ] and put into Pot.
Any potential flaws in the above ?

Thanks

Current rate is 20%, rising 1% per year till it hits 22%.

[bored]

I think you need to consult your accountant regarding what records he will need at the end of the year.

IANAA but is it even legal not to do any double entry bookkeeping and not record a journal?

[Sockpuppet]

I think you need to consult your accountant regarding what records he will need at the end of the year.

IANAA but is it even legal not to do any double entry bookkeeping and not record a journal?

You can do it any way you like as long as the way you do it represent a "true and fair view" - i.e. records anything.

Double Entry bookkeeping is just the "way" because that is how its best done but you can do it other ways.

[bored]

You can do it any way you like as long as the way you do it represent a "true and fair view" - i.e. records anything.

Double Entry bookkeeping is just the "way" because that is how its best done but you can do it other ways.

I had to check - here is the relevant part from the Companies Act:

221 [Duty to keep accounting records]

[(1) Every company shall keep accounting records which are sufficient to show and explain the company's transactions and are such as to

(a) disclose with reasonable accuracy, at any time, the financial position of the company at that time, and
(b) enable the directors to ensure that any balance sheet and profit and loss account prepared under this Part complies with the requirements of this Act.

(2) The accounting records shall in particular contain

(a) entries from day to day of all sums of money received and expended by the company, and the matters in respect of which the receipt and expenditure takes place, and
(b) a record of the assets and liabilities of the company.

I would say the original poster definitely needs to consult his accountant before going on.

[Archangel]

I do almost exactly what you suggest, but in addition keep a simple spreadsheet of income and expenditure (date of trans, who from or to, what for) which I send to my accountant at yearend. He then prepares the accounts for companies house and tells me exactly how much to give to HMRCE for the corp tax.

If the company pays a dividend I produce the paperwork (tax voucher & minutes of meeting)

This takes approx 10 minutes a month. The accountant charges £550 pa.

[Sockpuppet]

I would say the original poster definitely needs to consult his accountant before going on.

Agreed.

I would do what I do. Sage Instant accounting all the way.

This year I dumped the accountant and will do end of year myself. The program does the hard bits for you (as long as you enter it all correctly).

I did the accounts this year, gave them to an accountant and they changed 5 items in total (mostly made a group called "Employee Welfare" where I had several groups for wages, expenses incurrred.

They did however agree with my figure of the profit made...which is nice.

[Bluebird]

I do almost exactly what you suggest, but in addition keep a simple spreadsheet of income and expenditure (date of trans, who from or to, what for) which I send to my accountant at yearend. He then prepares the accounts for companies house and tells me exactly how much to give to HMRCE for the corp tax.

If the company pays a dividend I produce the paperwork (tax voucher & minutes of meeting)

This takes approx 10 minutes a month. The accountant charges £550 pa.

Thats what I intended doing - what I wanted was to ensure I had the "rough" calculations right so I wasn't too far from the mark or had overspent