Corporation tax return help please

[floricita]

Hi,

I had a contract role a long time ago, it was only for 2 months. I set up a ltd company for this.

My corp tax is due soon and I had a few questions which I hope someone might be able to help with.

Basically the total income was pretty low for that period so I don't particularly want to hire an accountant to do it and would like to try myself.

My main problem is that I was not particularly responsible or knowledgable back then. basically I didn't run my accounts properly.

I believe when you take money from your business account, you should do so by paying yourself a dividend.

Basically I didn't do this and I just used my business accont to buy things on the internet and transfer to my account.

I'm wondering how best to disclose this in the accounts return?

I'm guessing there isn't an option "I was an idiot" on the returns form?

I have kept all my reciepts, Iwas also wondering if HMRC's system automatically nets off allowable expenses submitted at the time of submission? Or whether this is done at a later point?

Any help would be great.

Thanks

[Clare@InTouch]

You cannot retrospectively declare a dividend, so the money you took out was either salary (if you ran a PAYE scheme) or a loan. If it's a loan you'll need to repay it, and potentially you should have filed a P11D. If you took all the cash from the company then you'll need to account for it, in one way or another. You also may need advice on what you could have claimed against your income.

In all honesty you sound like you need an accountant, as there's more than just CT issues here. There are also PAYE issues, expenses, taxes etc. You'll also need to file a personal tax return.

[TheFaQQer]

I believe when you take money from your business account, you should do so by paying yourself a dividend.

Assuming you are a shareholder, then that is one way to take money out of the business. Other ways would include salary or a loan (or embezzlement, but that's not really recommended).

Basically I didn't do this and I just used my business accont to buy things on the internet and transfer to my account.

I'm wondering how best to disclose this in the accounts return?

If you didn't take things as a dividend, then you must have taken them as salary (and paid any tax and national insurance due) or as a directors loan (and made sure that if this exceeded the threshold you either paid interest on the loan, or declared it as a benefit in kind when you did your P11D)

If this relates to last year, what figures have you got in place for your personal tax returns? You will need to account for the money being paid to you personally some how, unless you just hope that you can evade paying tax completely.

Given just how many things that it sounds like you have screwed up in such a short time, what makes you think that you have the skills to correct everything now without the help of paid-for advice?

[TheFaQQer]

(Is it just me or are Clare and I on the same wavelength about everything today?)

[northernladuk]

How long ago are we talking here.

[TheFaQQer]

How long ago are we talking here.

Somewhere between 21 months and 11 months ago. Otherwise corporation tax wouldn't be due on the two month contract.

(Corporation tax due now means year end was nine months ago. Therefore the latest start of the contract to be in that year must have been two months before year end, so started 11 months ago. Alternatively, the contract was at the start of the trading year, there was then ten months of no trading before year end, followed by nine months to pay the corporation tax)

[Clare@InTouch]

(Is it just me or are Clare and I on the same wavelength about everything today?)

Or we're stalking each other

[floricita]

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.

[floricita]

Given just how many things that it sounds like you have screwed up in such a short time, what makes you think that you have the skills to correct everything now without the help of paid-for advice?

Well I don't want any sympathy and I take full responsibility for not keeping proper accounts. But I had had some tragic incidents happen around that time and to be honest I didn't give two hoots about this little contracting job I had for a few weeks.

I work in finance, all be it, not an accountant and have good intelligence (yes admittedly my past actions may not reflect this to those that don’t know me)

But I can work out how to do it I’m sure.

[Scruff]

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...