Reply to: Corporation Tax Form CT600

[rmmc]

What you did 8 years ago was not down to your current business, and the fact that it was so long ago means you would have no chance of arguing with HMRC that it was incurred for the purposes of the current trade.

Even if the expense meets all the conditions Clare mentioned, there are other two factors which prevents this expenses being allowable for the tax purpose.

[Nixon Williams]

From reading this thread can I suggest you appoint an accountant?

We have just taken on a client who had done her own "accounts" for 7 years, she is now paying us to go back and correct her work.

Sadly, Companies House seem to accept anything for accounts, they do not even have to balance!

If you are not sure what you are doing, a good accountant can help and save you money.

[happydays1]

Ok I will do the full accounts first then thyat should give me the answer - cheers

[Clare@InTouch]

One other quick query on CH abbreviated accounts:

In order to reconcile the balance sheet where shareholders funds equal total net assets / liabilities

For total assets less current liabilities i have say £3k (cash in bank no other assets) and say total profit is £7k ..............could i put the difference of £4k under provisions for liabilities & charges.......as im not sure how i can get it too balance otherwise??

Thanks

No. The accounts you prepare must balance and you cannot simply write off any balance - if you've prepared them in statutory format then you're just copying the Balance Sheet onto the CH form.

If your profit was £7,000 and your bank balance is £3,000 then there must be something you've not considered. Dividends? Creditors? CT?

[happydays1]

ok will check it out - cheers for all your help also - much appreciated.

If you need any help with IFRS give me a shout!!

[Clare@InTouch]

Ok I think you have convinced me on the MSc. In terms of the ACCA, you can claim subs, course fees. What about exams / books / travel costs (to and from exams etc)

cheers

If the course you are doing is business related, and current, then you can claim certain costs. It does depend on what the course is though, and what skills you're learning. There's been a thread on training recently that has some good posts in it.

[happydays1]

One other quick query on CH abbreviated accounts:

In order to reconcile the balance sheet where shareholders funds equal total net assets / liabilities

For total assets less current liabilities i have say £3k (cash in bank no other assets) and say total profit is £7k ..............could i put the difference of £4k under provisions for liabilities & charges.......as im not sure how i can get it too balance otherwise??

Thanks

[happydays1]

Ok I think you have convinced me on the MSc. In terms of the ACCA, you can claim subs, course fees. What about exams / books / travel costs (to and from exams etc)

cheers

[Clare@InTouch]

Also, if I am doing my own accounts can I apply a fee for doing this?......in terms of time and effort etc?

It wouldn't be a good idea - any fee you charged the company you would need to declare as personal income, and you'd pay personal tax on it.

Also, if your an accountant why cant you claim for ACCA??

You can claim subscription costs and ongoing course fees, but not the cost of getting the qualification any more than you could claim the cost of sitting your GCSEs or A levels on the logic that they enabled you to read and write.

To claim an expense it has to be wholly, exclusively and necessarily for the purposes of the trade. What you did 8 years ago was not down to your current business, and the fact that it was so long ago means you would have no chance of arguing with HMRC that it was incurred for the purposes of the current trade.


Employment income: work-related training: reimbursement of pre-employment training expenses: Silva v Charnock (SpC332)

It is implicit in the definition of work-related training in Section 251(1), and related employment in Section 251(2), that the training cannot be “work-related” unless the trainee is employed by the employer at the time when the training is undertaken. Training that an individual undertakes of their own accord, at their own expense, and at a time when no specific employment is in view will not normally qualify as work-related training. It does not become work-related training simply because a new employer subsequently agrees or offers to reimburse the employee’s costs.

[happydays1]

Also, if I am doing my own accounts can I apply a fee for doing this?......in terms of time and effort etc?

[happydays1]

In terms of penalty what do you mean 100% tax penalty ?

Also, if your an accountant why cant you claim for ACCA??

[xoggoth]

Is it too late for me to claim for my degree in 1969?

I would only add what I've said before, use an accountant by all means but don't rely on them. Get to know stuff yourself and how to check your accounts.

[TykeMerc]

Basically the training is for tuition fees, books and travel on an MSc undertaken 8 years ago prior to trading in a ltd company, but the MSc is directly linked with the work i now do......basically if I didnt have the MSc i would not be qualified or able to do the work I now do??

You're far from being the only one who could argue that and more, I certainly could and I'm sure at least 50% of the CUK posters could in some shape or form. I'm absolutely sure it wouldn't fly and if HMRC became aware of it then you would get slapped VERY hard for attempting to completely take the mickey.

If nothing else I very much doubt you have relevant invoices to put through the books.

I'd be pretty shocked if I would be able to expense doing another post grad course starting next week which is very clearly related to my business and I'm already in business, an 8 year gap would again be extracting the mickey with extreme prejudice.

I realise you're trying to justify expensing and taking multiple thousands to yourself and of course that's entirely your own decision as the Director of Yourco Ltd, but I can't see HMRC sharing your view.
If they do accept it please let me know and I'll rod about 20k through my books that day for my under and post grad studies, all of which enable me to operate my business.

[rmmc]

For next year I shall definately be using an accountant!

In terms of:

A Directors' Report
Profit & Loss
Balance Sheet
Notes
Detailed Profit & Loss account

Where could i get hold of the format of these? as an example

I shall submit the abbreviated accounts for Companies House - what are the necessary Companies Act statements to be inserted? is it only the Companies House abbreviated accounts have to be submitted not any other form of accounts.

The AP is from June to May when the company started trading so I only think I need to complete one CT600?

The training costs (£5.5k) were incurred prior to trading (approx 8 years ago though) the remaining are ongoing but all are to improve on the qualifications to do the work in my field. I would have thought this is a cost and should not come under capital due to the length of time they have been incurred.

Cheers for this!

Basically the training is for tuition fees, books and travel on an MSc undertaken 8 years ago prior to trading in a ltd company, but the MSc is directly linked with the work i now do......basically if I didnt have the MSc i would not be qualified or able to do the work I now do??

Here is a sample accounts from HMRC Otherwise you can find the standard format from Companies Act. Companies house do provide that too.

I disagree that those training cost will be allowable. I trained as an ACCA, paid for my fees still I can not claim them as a business expenses. This is not the only reason the cost is not allowable there are other two reasons too. I suggest get an accountant, otherwise if you get it wrong, and if HMRC enquire into the companies tax affairs, you may end paying upto 100% of tax in penalty.

Not to mentioned that HMRC are going to check accounting record keeping of 50,000 businesses a year.

You should not rely on forums reply to do your accounts and tax forms. You may get general views and ideas but you do not get in depth advice. I saw your post in at least three different forums.

[happydays1]

Basically the training is for tuition fees, books and travel on an MSc undertaken 8 years ago prior to trading in a ltd company, but the MSc is directly linked with the work i now do......basically if I didnt have the MSc i would not be qualified or able to do the work I now do??