First end of year looming and peanuts to declare

[Jonny1979]

Morning All,

I'm new here and hope that I can ask you for assistance in relation to my first (and probably last!) year-end. I incorporated a limited company last year to provide drainage services. Two directors, myself and partner, though he immediately was unable to provide the service so I went back to full-time employment and sub-contracted the few jobs I've had to a local firm.

By "few" I really mean few; the business has taken apoxpr. £200 in the 12 months, which has been swallowed up by the £35-45/month phone bill, website creation software, domain name registration etc.

Obviously to pay an accountant would add insult to injury so I would ask your advice on how difficult it would be for me to complete the necessary paperwork myself?

As it stands, I'm not entirely sure what's involved, though a P&L sheet would take all of 2 mins to complete as there's been so little going on, save an occasional invoice to the sub-contractor.

Any help/advice will be much appreciated.

Thank you

Jon

[ClearSky Accounting Dan]

There are a few main tasks that need to be taken care of here:

- Financial statements (including profit and loss account, balance sheet and notes). These are to be prepared subject to UK accounting rules, in a specified format. Although you are able to file a cut down version (called abbreviated accounts) via Companies House webfiling, using their own accounts template, you will still need to prepare full accounts to HMRC to support the below form
- Corporation tax return and computation. This is to be filed with HMRC, again you can do this via a standard form on HMRC's website, however full accounts for your company should be sent with this (in iXBRL format). Record any losses on your return to carry forward and set again any future profits made by the ltd company.
- If a payroll scheme was set up then P35 should have already been filed and P11d is due for filing by 19th July.
- Annual return - this is a return made to Companies House showing the company directors and shareholders (again a standard form is available on Companies House webfiling service).

An accountant may be able to help you out with a one off service to get the company up to date or assist in closing down the company if you will no longer require it. In summary, many people find it easy enough to complete these tasks themselves, however whether they are done correctly or not is another matter.

[BrilloPad]

You can prepare the accounts - but you will need an accountant to sign them off.

[ClearSky Accounting Dan]

You can prepare the accounts - but you will need an accountant to sign them off.

You may be referring to larger companies that require audited accounts - these must have an audit report signed off by a Registered Auditor, however a small company does not require its accounts to be signed off by accountant....although generally a good idea to be prepared by an accountant.

[tractor]

...

Bag all your documentation and make an appointment at your local tax office.

Take all your stuff and outline the problem to the advisor that you see. Explain that it is a Limited Company and outline the circumstances that led to almost zero business and even less profit. Ask their advice on how to proceed. Make it clear that you are not prepared to invest money into a company that is unfortunately a lost cause.

If you are able to make the case well enough, they will write it off. Then, if they are willing not to oppose the striking off, it will cost you £15 at Companies House to apply for said striking off. It takes about 3 months and provided there are no other creditors, the company will be gone and with a bit of luck any potential HMRC liability. Of course you may have to deregister for VAT etc but it doesn't sound like you got as far as registering in the first place.

Clearly, if you have bought loads of fixed assets and then sold them back to yourself at a fraction of the cost, HMRC won't be very accomodating but as long as you are honest with them, they will be helpful.

At worst, they will tell you to go away and do it all properly. At best, you will divest yourself of all the problems and worry at very little cost and time to yourself.

The regular Inspector of Taxes are reasonable people. They will help you.

[Maslins]

On the basis you've made a loss, Google for form DS01, complete, and send to Companies House with a £10 cheque.

It's a slow process, typically taking ~4 months, as Companies House will need to advertise the striking off in a few places to check nobody thinks your company owes them money.

At this point, HMRC may write to you (seems to be quite rare these days) wanting to see some management accounts to show you don't have a corporation tax liability...but chances are you wouldn't hear anymore other than a couple of letters from Companies House advising on the progress.

[VectraMan]

You don't need an accountant.

You can do it online, using a PDF that you download from HMRC which also submits the accounts to companies house for you at the same time. Unfortunately they don't make it simple, even if your accounts are simple, but you can get through it if you have a reasonable amount of common sense. I did mine recently, which was quite simple on account of being a permie for most of the year, but still took a few hours. The form won't let you submit until everything adds up, which makes mistakes unlikely.

I'm not sure closing the company and ignoring it is such a good idea. You should do a return for every year you've traded (and they're quick with the £100 fines if it's not submitted by the deadline).

[xoggoth]

There is a principle of accounts accepted by HMRC, forget the name, that one does not have to expend undue effort over minor amounts. If you had had a turnover of £100k they would certainly be concerned about a 5% error but I doubt they would be bothered about a 50% error on profit on a turnover £200 given that tax is only 20%ish of that. Just get hold of a free accounts template and spend an hour or two filling it in to the best of your ability, it will almost certainly be adequate.