Accounting Mess

[Martin at NixonWilliams]

I have used my company account more like a personal account, meaning that my directors loan is pretty high. I have paid a £6000 dividend to the sole shareholder (me) and am looking to setup a payroll (but as of now do not have one).

I used MyCashPlus as a quick way of setting up a company account, however now only have three months of accounts available ... Will this be an issue?

I am looking for advise on the best way to resolve this and wanted to know if peoples typical experience of an accountant is that they would help with this type of situation? Do you think there would be anyone willing to assist with 'resolving' my account.

This can probably be sorted quite easily but it is important that you correct matters sooner rather than later as these things usually get worse the longer they are left.

If you owe money to the company you can simply repay the funds. If this is not possible, you could declare a dividend (but not actually pay it) to clear the balance. This is only possible if the company has the profit available for the dividend to be paid. If this is not the case it is likely that you have borrowed money that should be set aside for taxes, which can cause you a big problem.

If the balance exceeded £5,000 during 2013/14 (£10,000 from 06/04/14) then there will be a benefit in kind that must be declared, or the value of the benefit must be paid to the company as interest. The company will also suffer a surcharge if the loan is not repaid within nine months and one day of its yearend.

Most accountants will be able to assist you with this quickly and easily. Once sorted I would reccommend that you only withdraw amounts from the company in line with what you are owed in salary, expenses and dividends. In our experience the clients that stick to this are the ones who find the process of running a limited company hassle free.

I hope this helps.

Martin

[pacontracting]

Hi all,

I have been operating my limited company for 14 months, with no accountant. I am VAT registered and am up to date with my VAT, however after auditing my own accounts think that I need to submit an adjustment for a (small?) amount of around £3000.


My annual gross is £95000.

The accounting mess I have is as follows:

I have used my company account more like a personal account, meaning that my directors loan is pretty high. I have paid a £6000 dividend to the sole shareholder (me) and am looking to setup a payroll (but as of now do not have one).

I used MyCashPlus as a quick way of setting up a company account, however now only have three months of accounts available ... Will this be an issue?

I am looking for advise on the best way to resolve this and wanted to know if peoples typical experience of an accountant is that they would help with this type of situation? Do you think there would be anyone willing to assist with 'resolving' my account.

Any advice would be really appreciated, TIA.

As you may or may not know, you need to provide your first accounts 9 months after your companies FY year end. As you are 14 month in, you have time.

An accountant can easily rebuild your accounts from your bank statements. You mention you've been using your directors loan account (so just withdrawing money?). There are certain rules about directors loans and what the balance of this should be after year end but again, your accountant can deal with that.

The only worrying statement you make is that you only have three months of your MyCashPlus accounts? available? I read this as you only have three months worth of statements but that would be unusual.

As a Company Director, you have certain obligations and maintaining accurate records is one of them. Failure to comply may mean you are liable to a fine, imprisonment or both (Companies Act 2006 Section 387). Obviously this is the worst case but highlights the seriousness with which the law holds the obligations of a company director.

Talk to an accountant (as per those mentioned above) and hopefully, this will be easily sorted.

[psychocandy]

Its like groundhog day here. Every week we get one of these.

I've been earning x and screwed up my accounts what can I do? Do people really think they can cope themselves without an accountant?

This guy is grossing 95K and wants to save £100 a month and do it himself???

[JB3000]

WJB3S plus....

Prepare to pay way over the odds for the first period. Bear in mind that your CT return will be due soon too. You bandy some figures around in your post but seriously, they are worthless until you sort yourself out. A miss in these circumstances is as good as a mile unless you are experienced in these matters so your 3k adjustment could just as easily be 30k and I suspect it's more likely to be nearer the latter.

If you only have 3 months worth of accounts available, does that mean you have only been recording transactions for 3 months or do you throw receipts and invoices into the back of your car like Selwyn Froggat 'files' parking tickets?

Either way, you have a lot of unpaid work ahead of you and I hope you have copies of all your business bank account statement because that is the best place to start unravelling your problems.

I have no sympathy for your cavalier attitude. It does you no favours and gives ammunition to HMRC and IR35 and anti-contractor supporters.

You should expect to pay around £600 - £800 (including VAT) for first year's accounts and corporation tax returns. The fees for your first year will be lower as you haven't been wasting your accountant's time throughout the year with questions and your accountant hasn't had to VAT register you, do VAT returns, PAYE, and form your company, etc. If you paying anything more than £800 (including VAT) you are getting ripped off. In addition, you'll probably need to pay another £120 (including vat) for your 2013/14 self assessment tax return.

Assuming you have copies of VAT returns, VAT calculations, expenses and company bank statements in excel format it should take your accountant around a day to do the job. I'm assuming you have had your contract(s) reviewed and that you are outside IR35.

Your abbreviated accounts and corporation tax payment will probably be due in February or March 2015 so fortunately you have time on your side.

It would have made sense to bring an accountant in earlier so that he/she could have advised on how to reduce your tax via company salary, pensions, avoiding overdrawn loan accounts, etc. So because you are bringing in an accountant at a later stage expect to have to hand over more tax to HMRC than necessary.

Going forward you can expect to pay your accountant around up to £110/month (including vat); again, any more is a rip off.

[Waldorf]

Speak to my accountant, Nixon Williams, they can sort you out as they did exactly the same for a friend of mine a while ago. They will also check through the past to ensure that you have not cocked anything up.

Nixon Williams have an online system now so you maybe able to use that to check and correct anything that you have done.

Either way, give someone a call, the worry and hassle of doing it by yourself is just not worth it.

[tractor]

...

WJB3S plus....

Prepare to pay way over the odds for the first period. Bear in mind that your CT return will be due soon too. You bandy some figures around in your post but seriously, they are worthless until you sort yourself out. A miss in these circumstances is as good as a mile unless you are experienced in these matters so your 3k adjustment could just as easily be 30k and I suspect it's more likely to be nearer the latter.

If you only have 3 months worth of accounts available, does that mean you have only been recording transactions for 3 months or do you throw receipts and invoices into the back of your car like Selwyn Froggat 'files' parking tickets?

Either way, you have a lot of unpaid work ahead of you and I hope you have copies of all your business bank account statement because that is the best place to start unravelling your problems.

I have no sympathy for your cavalier attitude. It does you no favours and gives ammunition to HMRC and IR35 and anti-contractor supporters.

[JB3000]

Hi all,

I have been operating my limited company for 14 months, with no accountant. I am VAT registered and am up to date with my VAT, however after auditing my own accounts think that I need to submit an adjustment for a (small?) amount of around £3000.


My annual gross is £95000.

The accounting mess I have is as follows:

I have used my company account more like a personal account, meaning that my directors loan is pretty high. I have paid a £6000 dividend to the sole shareholder (me) and am looking to setup a payroll (but as of now do not have one).

I used MyCashPlus as a quick way of setting up a company account, however now only have three months of accounts available ... Will this be an issue?

I am looking for advise on the best way to resolve this and wanted to know if peoples typical experience of an accountant is that they would help with this type of situation? Do you think there would be anyone willing to assist with 'resolving' my account.

Any advice would be really appreciated, TIA.

Of course an accountant will help you with your accounts- is this some sort of wind up?

Just google "contractor accountants" and call a few of the accountants, e.g. SJD, inni, clearsky, crunch, nixon williams, etc and find out about their fees to prepare your last year's accounts + monthly fee going forward.

Once you have chosen your accountant send them your stuff, e.g. vat returns, vat calculations, expenses and company bank statements, and they should be able to prepare your accounts and corporation tax return within a week or two. Probably much quicker if you provide all of the above information in excel format.

Simples.

[jimmyitguy]

Hi all,

I have been operating my limited company for 14 months, with no accountant. I am VAT registered and am up to date with my VAT, however after auditing my own accounts think that I need to submit an adjustment for a (small?) amount of around £3000.


My annual gross is £95000.

The accounting mess I have is as follows:

I have used my company account more like a personal account, meaning that my directors loan is pretty high. I have paid a £6000 dividend to the sole shareholder (me) and am looking to setup a payroll (but as of now do not have one).

I used MyCashPlus as a quick way of setting up a company account, however now only have three months of accounts available ... Will this be an issue?

I am looking for advise on the best way to resolve this and wanted to know if peoples typical experience of an accountant is that they would help with this type of situation? Do you think there would be anyone willing to assist with 'resolving' my account.

Any advice would be really appreciated, TIA.