Default Where to report Dividends when filing company accounts and tax return

[eek]

Hi iandres,

Im trying to complete my forms, but numbers do not add up and unfortunately cant afford to pat £1k for a professional accountant. Would you be kind and share your final numbers on P&L ns Balance Sheet.
Your help would be much appreciated!

Open a mettle bank account that gives you a free agent account.

Enter the details into freeagent and that will give you the figures.

[joannak]

pls help

Hi,
I was reading your post in detail and took into consideration most of this useful information, I think my BS is "balanced" now and every pence in its place, thank you very much for your help.

Regarding why my staff cost is 0 is basically because at the beginning of the financial period I took advice for an accountant and he told me that because I won't know how many days I will stay in UK until the end of the year, I can not guaranty of my UK residency so I was better off taking dividends instead of declaring myself as employee and having salary. Not sure about this either, he didn't explain me how much this decission might cost me? (what I know if that his 1 hour advice cost me £180)

Regards,
iandres.

Hi iandres,

Im trying to complete my forms, but numbers do not add up and unfortunately cant afford to pat £1k for a professional accountant. Would you be kind and share your final numbers on P&L ns Balance Sheet.
Your help would be much appreciated!

[iandres]

Despite your historical posts on all this, I'll have a go ...

As others have stated, the VAT FRS ‘profit’ should be within Turnover on the P&L account – it is often termed ‘irrecoverable VAT’ on detailed accounts working sheets for Turnover (but these details are not necessarily submitted to any authorities outside YourCo board/shareholders - you).

Note your ‘staff costs’ may be zero (maybe you really didn’t want any PAYE/NI/pension/other benefits this year, perhaps justified for a quiet year or just finishing/starting out, however I don't really know for your previous nationality questions) but should typically include any accountant/legal services YourCo has bought, although perhaps not if they are part of a business insurance package (which go under non-staff admin costs). Similarly, maybe your VAT was fully paid earlier in the year with nothing outstanding at year end?

For the dividends, also as others have noted, your figures currently show you have no ‘dividends paid out in the accounting period’ (i.e. no interim/full dividends were actually paid) under the P&L account – otherwise your Balance sheet sums wont match. Maybe you will declare and pay any 'full' (no longer 'interim') dividends for last year in this year? Basically, a balance sheet is the sum of actual 'cash at bank and in hand' (at year end) +/- creditors & debtors, matched ('balanced') with the sum of the P&L + shares.

As a complete aside, when you finally get there, an exact match for the Balance sheet sums is essential on the HMRC website, but their website workings have various whole-pound roundings that normally throws these sums out by a pound or so, but you have to get it exactly right, but that means 'adjusting' one or two of the P&L figures by 49p or whatever, but ... but that’s just annoying!

Overall, how everything (including your various ‘other charges’ such as T&S expenses - all subject to their many associated HMRC rules) is accounted for and reported will depend upon the accounting policy you have chosen to adopt for your company accounts (typically start with the Financial Reporting Standard applicable to the Micro-Entities Regime (FRS 105, July 2015) – worth a quick skim read at least, alongside the Companies Act 2006 itself, to understand a director’s personal legal duties and obligations). As others strongly advise, you should really consider paying for a suitably-experienced accountant, partly because they have their own indemnity insurance if they misadvise you, but mostly because they should save you a considerable amount of time reading about it all, and save considerable time/money exposure later if/when accounts are challenged. Perhaps your business value leads you to think an accountant isn’t justified, and you may be correct, but it’s your decision to make and risks to run.

BTW, I am not a qualified accountant, and these are just my rambling thoughts as I meander towards MyCo’s accounts - but I have been contracting since the 90s, and been troubled by accounts/accountants a few times, which forces it all to be much clearer.

Hi,
I was reading your post in detail and took into consideration most of this useful information, I think my BS is "balanced" now and every pence in its place, thank you very much for your help.

Regarding why my staff cost is 0 is basically because at the beginning of the financial period I took advice for an accountant and he told me that because I won't know how many days I will stay in UK until the end of the year, I can not guaranty of my UK residency so I was better off taking dividends instead of declaring myself as employee and having salary. Not sure about this either, he didn't explain me how much this decission might cost me? (what I know if that his 1 hour advice cost me £180)

Regards,
iandres.

[iandres]

Oh where to start..............VAT liability in current liabilities, dividends paid, directors loan, etc.



Your bottom figure of £3201 would be correct but would throw out your balance sheet. Have you not paid out the dividends as yet?

Also, as mentioned before you've no liability for VAT within the current liabilities section. Do you now owe HMRC anything for VAT at the year end? Is it all paid up?

As @NLUK would say, ask an accountant

Hi,
you are right and I amendmed the balance sheet to accomodate the figures as it had to be including Dividend in it.

Regarding the VAT everything was pay up during the period, actually I'm not registed anymore because of the new FRS rules.

Thanks for your help!

[MrHappy]

Despite your historical posts on all this, I'll have a go ...

As others have stated, the VAT FRS ‘profit’ should be within Turnover on the P&L account – it is often termed ‘irrecoverable VAT’ on detailed accounts working sheets for Turnover (but these details are not necessarily submitted to any authorities outside YourCo board/shareholders - you).

Note your ‘staff costs’ may be zero (maybe you really didn’t want any PAYE/NI/pension/other benefits this year, perhaps justified for a quiet year or just finishing/starting out, however I don't really know for your previous nationality questions) but should typically include any accountant/legal services YourCo has bought, although perhaps not if they are part of a business insurance package (which go under non-staff admin costs). Similarly, maybe your VAT was fully paid earlier in the year with nothing outstanding at year end?

For the dividends, also as others have noted, your figures currently show you have no ‘dividends paid out in the accounting period’ (i.e. no interim/full dividends were actually paid) under the P&L account – otherwise your Balance sheet sums wont match. Maybe you will declare and pay any 'full' (no longer 'interim') dividends for last year in this year? Basically, a balance sheet is the sum of actual 'cash at bank and in hand' (at year end) +/- creditors & debtors, matched ('balanced') with the sum of the P&L + shares.

As a complete aside, when you finally get there, an exact match for the Balance sheet sums is essential on the HMRC website, but their website workings have various whole-pound roundings that normally throws these sums out by a pound or so, but you have to get it exactly right, but that means 'adjusting' one or two of the P&L figures by 49p or whatever, but ... but that’s just annoying!

Overall, how everything (including your various ‘other charges’ such as T&S expenses - all subject to their many associated HMRC rules) is accounted for and reported will depend upon the accounting policy you have chosen to adopt for your company accounts (typically start with the Financial Reporting Standard applicable to the Micro-Entities Regime (FRS 105, July 2015) – worth a quick skim read at least, alongside the Companies Act 2006 itself, to understand a director’s personal legal duties and obligations). As others strongly advise, you should really consider paying for a suitably-experienced accountant, partly because they have their own indemnity insurance if they misadvise you, but mostly because they should save you a considerable amount of time reading about it all, and save considerable time/money exposure later if/when accounts are challenged. Perhaps your business value leads you to think an accountant isn’t justified, and you may be correct, but it’s your decision to make and risks to run.

BTW, I am not a qualified accountant, and these are just my rambling thoughts as I meander towards MyCo’s accounts - but I have been contracting since the 90s, and been troubled by accounts/accountants a few times, which forces it all to be much clearer.

[Darren at Fox-Bartfield]

Accounts

Oh where to start..............VAT liability in current liabilities, dividends paid, directors loan, etc.



Your bottom figure of £3201 would be correct but would throw out your balance sheet. Have you not paid out the dividends as yet?

Also, as mentioned before you've no liability for VAT within the current liabilities section. Do you now owe HMRC anything for VAT at the year end? Is it all paid up?

As @NLUK would say, ask an accountant

[iandres]

In my accounts there is no FRS line. The 'gain' is simply part of the turnover figure. Turnover is calculated as individual amounts of gross fees inc VAT minus VAT paid. So the turnover is a bit higher than gross fees less VAT charged.

Hi and thanks a lot for your answers,

so yes, FRS is VAT basically, and if I fully understand and taking in account my figures, if my Net turnover (excluding VAT) is 20000, the VAT that I charged was 4000 and the VAT I paid to HMRC was 3480 (calculated based in my 14.5% FRS), then there are 520 pounds that will add up to my net turnover, so in my P&L I should report 20520 as TURNOVER. Does it make sense?

Regarding the dividends I'm still wondering if I had to report them in the Balance Sheet, not sure if as a enclosed note or calculated in the Total Net Assets. Currently I calculated not including the Dividens:

* Total Net Assets = 13201 (1 called up share capital + 20000 turnover - 3500 expeses - 3300 Corporation Tax)

Should it be like this?:

* Total Net Assets = 3201 (1 called up share capital + 20000 turnover - 3500 expeses - 3300 Corporation Tax - 10000 Dividends)

Thanks in advance,
iandres.

[MrMarkyMark]

Generally speaking, people pay for information as a last resort. Saying 'don't ask us - pay for somebody' is really a pointless remark, not to say unduly rude.

Not really, its good advice for the OP.
Accounting is a serious matter, the OP said he didn't know about 3 items, what else doesn't he know?
Seeing many on here get into real problems due to trying to do their own accounts has a bearing, just maybe?

As for real pointless remarks you appear to have just made one.

[Cirrus]

Is this not Accounting/Legal?

People who have doubts, are not sure, don't know where to put things etc. usually hire a qualified person to do it for them.

HTH.

Generally speaking, people pay for information as a last resort. Saying 'don't ask us - pay for somebody' is really a pointless remark, not to say unduly rude.

[Darren at Fox-Bartfield]

VAT

People who have doubts, are not sure, don't know where to put things etc. usually hire a qualified person to do it for them.

HTH.

Agree!

If by FRS = VAT, doesn't appear to be a VAT creditor on the balance sheet as well as any dividend adjusted on the profits/reserves.

[Cirrus]

Any FRS gain is part of your turnover, if that's what you mean.

In my accounts there is no FRS line. The 'gain' is simply part of the turnover figure. Turnover is calculated as individual amounts of gross fees inc VAT minus VAT paid. So the turnover is a bit higher than gross fees less VAT charged.

[VectraMan]

Any FRS gain is part of your turnover, if that's what you mean.

[MrMarkyMark]

People who have doubts, are not sure, don't know where to put things etc. usually hire a qualified person to do it for them.

HTH.

[Cirrus]

For FRS I assume you mean VAT. This would appear in your creditors if your accounting year doesn't match your VAT periods. Dividends will be shown in P&L somewhere. After Corporation Tax.

[iandres]

Hi,
I was filling my annual accounts for my Ltd Company (Micro-entity annual accounts) and I have doubts about where to report these two concepts:
- Dividends: should I report Dividends in any box or just as a statement note?
- FRS (not sure if I need to declare any figure regarding this in the Accounts)

I'm not employee of the company so I'm not getting any salary, so my PL and Balance sheet look like this now:

P&L
-Turnover: 20000
-Other income: 3 (bank interest on cash)
-Cost of raw materials and consumables: 0
- Staff cost: 0
- Depreciation an other amounts written off assets: 0
- Other charges: 3500 (I have included here my expenses, travel costs, mobile bills, a monitor, mobile device, etc. Not sure if this had to go under "Cost of raw materials and consumables")
- Tax on profit: 3300 (corporation tax)
Profit: 13200

BALANCE SHEET
- (AC460)Called up share capital not paid: 1
Fixed Assests
- (AC450)Fixed Assets: 0
Current Assets
- (AC455)Current Assets: 16500
- (AC465)Prepayments and accrued income
- (AC458)Creditors: amounts falling due within one year
- (AC60)Net current assets (liabilities): 16500
- (AC62) Total assets less current liabilities: 16501
- (AC64) 2016 Creditors: amounts falling due after more than one year: 3300
- (AC66) 2016 Provision for liabilities
- (AC470) 2016 Accruals and deferred income
- (AC68) 2016 Total net assets (liabilities): 13201
Capital and reserves
- (AC70) 2016 Called up share capital: 1
- (AC74) 2016 Profit and loss account: 13200
- (AC80) 2016 Total shareholders' funds: 13201

Any help will be appreciated, thanks in advance.

Iandres