Accounts Software

[brigzy]

So far so good...

Dear Friends

I am up and running with DIYAccounting.

This is handling :
All my VAT
Sales
Purchases
Expenses
Corp tax
Companies house return
Balance sheet
P&L
PAYE
etc.

I have all my Sales & Purchases & Expenses in (my ltd co was incorporated in Jan).

The DIY Accounting forum/community is friendly and very helpful indeed.

Will post again in a month or so- will be doing first PAYE & VAT submission in April, so I will let you know how I get on - not worried so far.

One idea:
My corp tax is not going to be due for over a year, how about drawing it out each month via directors loan account, and investing the funds into (say)premium bonds? Sell the bonds and pay company back before year end to clear directors loan?

[Clare@InTouch]

One idea:
My corp tax is not going to be due for over a year, how about drawing it out each month via directors loan account, and investing the funds into (say)premium bonds? Sell the bonds and pay company back before year end to clear directors loan?

There are tax implications to a loan account - even if you repay it before the tax is due thereby avoiding section419, there would still be a benefit in kind charge. Unless you're very lucky with the bonds, the extra tax may well outweigh any benefit you've gained.

Worth talking to an IFA about investments the company itself can make though.

[brigzy]

benefit in kind charge

Ah it would be very useful to know the rules / charges invloved ..any online reference? ...

Thanks Clare

[Clare@InTouch]

Try here:

http://www.hmrc.gov.uk/ct/managing/director-loan.htm

[brigzy]

Good link

Try here:

http://www.hmrc.gov.uk/ct/managing/director-loan.htm

That is a great link Clare.

I notice they say :
Your director’s loan account is paid off by the end of your company’s accounting period
If you pay off your director’s loan in full by the last day of your company’s Corporation Tax accounting period:

•your company does not pay Corporation Tax on the loan
•you don’t need to tell HMRC about the loan on your Company Tax Return
For example, your company’s accounting period runs from 1 April 2008 to 31 March 2009, and you pay off your director’s loan account on 30 March 2009. You don't need to include any information about this loan on your Company Tax Return.

The only tax implications I can see are if I have loaned money to the company and been paid interest & hence some tax due on interest. But looking at the above it appears I can hold funds in bonds & as long as it gets back into the company before year end I should be ok?

Thanks Clare

[Clare@InTouch]

If you have an overdrawn loan account that is repaid within 9 months of the year end there won't be CT to pay on it. Go careful about repaying a loan then taking it out again straight away in order to avoid this rule though, HMRC could look through the transaction and tax you on it anyway.

You need to consider the benefit in kind implications on taking a loan over £5,000. In simple terms HMRC will charge you tax on the value of the deemed interest you have saved by taking a loan from the company rather than from a bank. Your company will then pay employer's NI on that value too.

Say for example you have a loan of £10,000 - the deemed interest would be based on HMRC rates of (say) 6%. That's £600 interest over a year. If you're a higer rate taxpayer you'll pay £240 in tax and the company will pay £76.80 in NI.

You therefore need to ensure any bond you're buying is certain to beat that extra liability, or you'll be out of pocket.

[brigzy]

If you have an overdrawn loan account that is repaid within 9 months of the year end there won't be CT to pay on it. Go careful about repaying a loan then taking it out again straight away in order to avoid this rule though, HMRC could look through the transaction and tax you on it anyway..

The funds wouldn't be paid out again they would be used to pay corp tax bill.

You need to consider the benefit in kind implications on taking a loan over £5,000. In simple terms HMRC will charge you tax on the value of the deemed interest you have saved by taking a loan from the company rather than from a bank. Your company will then pay employer's NI on that value too.

Say for example you have a loan of £10,000 - the deemed interest would be based on HMRC rates of (say) 6%. That's £600 interest over a year. If you're a higer rate taxpayer you'll pay £240 in tax and the company will pay £76.80 in NI.

I found no reference to a deemed interest or benefit in kind rule so far?

[Clare@InTouch]

The funds wouldn't be paid out again they would be used to pay corp tax bill.


I found no reference to a deemed interest or benefit in kind rule so far?

Depends where you look

http://www.hmrc.gov.uk/paye/exb/a-z/l/loans.htm

[brigzy]

Depends where you look

http://www.hmrc.gov.uk/paye/exb/a-z/l/loans.htm

Another great link Clare.

Looks like if I keep it to 5k then & all should be well

For fun see how likely my corporation tax could make some :
http://www.moneysavingexpert.com/sav...ds-calculator/

Thanks Clare

[weinerburg]

I use Free Agent and I do all of my own accounts with it. I really like it but there are lots of other options too.

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Hi, Thanks for update us. I too looking for the best accounting software, finally I got the best suggestion here.

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