Corporation tax return help please

[Clare@InTouch]

Thanks.

so to clarify, am I still able to offset the tax by reclaiming a portion of allowable expenses?

This was ages ago I think 18 months ago.

I think hiring an accountant would cost the same as the tax owed itself!

Will also look to get the company closed as I haven't used it since that time.

Not getting an accountant could cost you a whole lot more if you end up with penalties and interest for non-filing of documents. Are the accounts already late? The CT return? Your personal tax return? I think you need to start off by figuring out exactly what you need to do and what timescales you're working to.

Also consider that you're going to have to prepare a set of accounts in the necessary format and file them with HMRC & Companies House, and handle the company closure too.

[floricita]

Not getting an accountant could cost you a whole lot more if you end up with penalties and interest for non-filing of documents. Are the accounts already late? The CT return? Your personal tax return? I think you need to start off by figuring out exactly what you need to do and what timescales you're working to.

Also consider that you're going to have to prepare a set of accounts in the necessary format and file them with HMRC & Companies House, and handle the company closure too.

Hi, I have never filed a personal tax return before.

The Corporate tax is not overdue yet.

[floricita]

If you have no Accounting ability to produce a set of Financial Statements, then you will likely get a £1000 fine from Companies House, since you need to file a copy with them, too? HMRC will also be chasing you for the Company's Tax Return and your personal Tax Return will also be incorrect...

I am amazed that you think that you can get away with not having an Accountant?

I see a world of pain for you - from what you have told us so far, you appear to have used the Company's Bank account to fund part of your lifestyle? Does the Company Bank Account still have funds in it?

You will not be able to close the Company down without clearance from HMRC, in any event...

Hi, well as pointed out, and irrespective of my past actions I do have some accounting ability as I work in finance (although I'm not an accountant, very familar with financial statements etc).

No funds in the bank account, no.

[stek]

Hi, well as pointed out, and irrespective of my past actions I do have some accounting ability as I work in finance (although I'm not an accountant, very familar with financial statements etc).

No funds in the bank account, no.

Don't even think about it, the accounting itself isn't hard, but the legislation surrounding it is, especially for IT contractors, it will take you weeks if not months to grasp it.

Engage an accountant and pay up.

[floricita]

Essentially, all I'm trying to do is pay the correct amount of tax by the correct due date and then close the comany as it's been dormant for 18 months or so.

Is mismanagement of a company that was operting for a couiple of months and made a few grand in that time something that HMRC is really going to come down hard upon if they get the correct amount of tax and by the correct time?

And is it too late to offset the expenses?

[floricita]

Don't even think about it, the accounting itself isn't hard, but the legislation surrounding it is, especially for IT contractors, it will take you weeks if not months to grasp it.

Engage an accountant and pay up.

Like what kind of legislation?

Excuse me of my complete ignorance, this is the first time I'm looking into it (long overdue I know). But if I earned x amount isn't the corp tax just the tax amount x that amount? If I can offset expenses, then that's just a net calculation after working out allowable ones. Or am I missing something here? Just wondering why it's so complicated?

No other employees etc

[TheCyclingProgrammer]

I think hiring an accountant would cost the same as the tax owed itself!

Will also look to get the company closed as I haven't used it since that time.

How much do you think the penalties will be for getting this wrong? Get an accountant.

I assume you filed your annual return?

[floricita]

Yes I filed that.

[Scruff]

You really must be a sockie?

If not, then consider this.

1. You need to prepare Financial Statements for HMRC and Companies House.
2. You need to complete a Company and Personal Tax Return.

You clearly don't understand the Statutory requirements. Just because you work in Finance doesn't mean you know how to prepare the Financial Statements with the correct disclosure and/or format?

You have missed the boat on Dividends and have cleared the Company Bank Account out. I don't think that you will get any sympathy from anyone on here, since you have been an irresponsible Business Owner.

Take your very short arms out of your very long pockets and be prepared to pay a properly qualified accountant to help dig you out of your hole.

[TheCyclingProgrammer]

Like what kind of legislation?

Excuse me of my complete ignorance, this is the first time I'm looking into it (long overdue I know). But if I earned x amount isn't the corp tax just the tax amount x that amount? If I can offset expenses, then that's just a net calculation after working out allowable ones. Or am I missing something here? Just wondering why it's so complicated?

No other employees etc

The kind of legislation that says:

* When you need to file an annual return with Companies House
* When you need to file a Corporation Tax return with HMRC
* When you need to file your accounts with Companies House and with HMRC
* Your legal obligations as a company director
* Your obligation to register for self-assessment if necessary and declare your earnings to HMRC

How can you begin to offset your expenses and work out your taxable profit if you don't know what you can legitimately claim as business expenses? There's also the BIK implications of any expenses you paid through the company to consider.

The only way you are going to sort this out is to pay an accountant to sort your mess out for you.

For starters, what was your turnover? If you want any help on here at all, your turnover would give an indication of how much of a mess you are in. Its possible that you could treat all of your drawings from the company account (including any personal expenditure that has been incurred through the business account, if any) as a director's loan but there are further implications of this depending on how much money is involved.

In short: once you've worked out your legitimate business expenses and calculated your taxable profit, you can calculate your corporation tax bill. After deducting your corporation tax, the rest is retained profit and if you've simply taken that money you should strictly treat it as a directors loan. The money needs to be withdrawn correctly as a capital distribution upon winding up of the company. If you've taken more than the retained profit and not left enough to cover the corporation tax, then in the first instance you're going to have to find that money to pay your CT bill.