I am a recently self employed bookkeeper. I have a basic question which probably makes me sound a bit simple. A potential client set up a LTD company in December and did nothing until March when he bought a beauty salon. Would his accounts run from Dec or Mar?
Ahh what the heck I'm going to hazard a guess, and there's a huuuuge chance I'll get corrected but I would say they would run from December and you could bring them into line by doing the year end at the end of March then having them run from April to March.
Your client should have received a letter from HMRC telling him his accounting dates.
In the absence of the letter I would say from December but there may be other factors that change this.
I am guessing your client set up the Ltd Co and has let it sit dormant and not made any changes, if he has not made other arrangements, then HMRC take the first year end as 12 months from the first day of the month following incorporation, so if the company was set up on 15 December 2009, then the first year end will be probably be set at 31 December 2010 by HMRC.
Hope that helps
Bill
-- Edited by Wella on Friday 9th of April 2010 09:05:50 AM
I'm with Bill, unless there has been a change of accounting date then the first set of accounts will run to end of December assuming co was incorporated in the previous December. Make sure they have sent in theur CT41G form now the company has stared before they end up with £100 fine.
sorry, off doing other things and missed this post. the other Amigo's have given the same answer that I would have but for further information you might also want to refer to the companies house website :
You will find the whole document useful but in relation to your question specifically Chapter 2. Accounting Reference dates.
Have fun,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Yes, when they registered they would have been allocated an Accounting Date, but they can change it. You can run a period of greater or less than 12 months to bring the year end date to what they want. Check the rules with Companies House.
Just be aware, that if they choose to do a 16 month year to bring the accounting date to the end of March, then an accounting package like Sage will not be able to cope with an accounts year greater than 12 months.
Yes that's a good point Liz. I've just come back today from a new client who have a July year end and were looking at changing to December. One of the things they do is sell on-line greetings cards, so I thought it would be a hectic time to have a year end so they seem happy to stick with where they are now.
This is more a question in relation to the post than an answer sorry.
If he set up the business in December what about the bank charges every month on the business bank account from december to march? Or any other small costs that were incurred such as envelopes, stamps, phonecalls relating to the business? Could it be possible that no small transactions whatsoever have occured in the three months?
-- Edited by Noola on Wednesday 16th of February 2011 01:58:49 PM
This is more a question in relation to the post than an answer sorry.
If he set up the business in December what about the bank charges every month on the business bank account from december to march? Or any other small costs that were incurred such as envelopes, stamps, phonecalls relating to the business? Could it be possible that no small transactions whatsoever have occured in the three months?
-- Edited by Noola on Wednesday 16th of February 2011 01:58:49 PM
The expenses may be treated as pre-trading expenses if they are before the official date the business started to trade.
I had a client last year that spent £35K on purchasing stock from China 4 months before they started to trade. The delay was cause by it taking that long to open a bank account (the bank kept losing the paperwork) and so the stock sat in a wharehouse waiting for the first day of trading when they could start to arrange for it to be sold!
-- Edited by YLB-HO on Wednesday 2nd of March 2011 04:28:18 PM
