Changing Ltd Co - accountant query

[dazza12]

My main contracting company got into difficulties when a client stopped paying invoices. These difficulties lasted for some time, improved, got bad again and to cut a long story short, this company is just about to enter into a CVA.

As there are restrictions on a company in a CVA such as not drawing profits etc, this cancelled out any benefits of working through a Ltd, so I'd been looking at alternatives.

I've got a 2nd company that I also control that had originally been set up to run my small online business (ecommerce and web hosting) and after speaking to the Insolvency Practitioner, it's been suggested that I use the 2nd company to contract through.

I've made a few changes to allow this, registered the 2nd Company for PAYE etc, and informed the client. The client however is a bit slow to update their systems, and again, the IP and accountant have suggested temporarily invoicing the client from Company 1, then Invoicing Company 1 from Company 2. Complicated I know, but it's only for 3-4 weeks.

I've been running Company 2 on Sage Accounts, and to cut down my costs, I'd like to run both via this route. I'm fairly confident in the working of the software, and don't mind spending an hour a week updating ledgers etc. However, at the moment I use an accountancy firm for company 1 who do everything - they keep track of my accounts etc, file various returns and provide me with my annual return etc. As they charge a small fortune for this I'd like to do all of this, and I'm hoping it's something I can transfer without too much pain.

What would be the best way to transfer? My accountant uses their own in-house system, so they can't send me a file already set up, nor are they compatible with the Accountant Link function. Is there a particular procedure to go through regarding transferring all of the accounts to myself (asking for specific figures etc) and how would I go about transferring all of this?

Also, regarding Sage itself. I have a 2 company version of Sage Accounts 50 Professional. Company 2 is already set up on this, and subject to the above, so will Company 1 shortly. Do I need the extra expense of a payroll solution for this, or is the payroll for IT consulting fairly straightforward? If not - can I get away with the Instant version or does this need to be the same 'level' as the Accounts software?

Cheers,

dazza12

[Clare@InTouch]

Ask your accountant for a trial balance up to the date they cease to act for you - you can then use this as the opening balances for the second company on Sage. If you want the full history of what makes up the figures however, you'd simply have to go back to the start of the company financial year and input everything (or ask the accountant for a nominal ledger too - this will give you the detail should you ever need it, it just won't be on Sage).

Many people find the HMRC payroll guidance CD enough, it depends on whether your payroll is simple. You may need help if you have an unusual tax coding (K code for example) or you need to file a P11D.

[dazza12]

Thank you very much for this. I'll give them a call. No doubt they'll insist on charging me their ad-hoc fee for going into my account and pressing 'print'...

Regarding handling things myself, does Sage have the ability to produce annual accounts? Although I'm already using it for my other company, I've not had to do this yet.

[Clare@InTouch]

Unfortunately not - accounts have to be in a certain format and Sage won't provide this. For Companies House you can simply file online, that way the template will put everything into the right format. For HMRC you'll need to provide full accounts and a CT return. You can try copying the accounts your accountant provided last year, or have a go yourself and arrange for an accountant to check them through for a reduced fee (until you're confident to do them yourself).

In my view (slightly biased as it is I'm afraid) you'd be best to have an accountant check everything at year end anyway. It will ensure you're claiming only legitimate expenses, capital allowances, tax calculations are correct etc. HMRC penalties are based upon how careful/honest you've been in providing and preparing information, so having an expert check out your work would help if this ever became an issue. Just make sure you agree the fee in writing before any work is carried out.

[Darren@UptonAccountants]

Accounts

Sage will produce a profit & loss account together with balance sheet but not in Companies Act format. These are available from Co House website but maybe worthwhile asking an accountant to review them to make sure all ok.