I'm new here, and have been tearing my hair out over my first set of company accounts that I have to file.
I have downloaded the companies house ABBRV document and am at the balance sheet. Could I ask a few questions please?
OK, this is for the period September 2008 to September 2009. Pretend the company made £5000 via PayPal in that time. £3000 given in wages/advertising etc.
I'm left with £2000 but obviously haven't taken a wage. I'd like to set the balance as negative as I owe my self say £10,000 in design/time etc for that period.
How do I go about filling in the boxes? They make no sense, I've tried googling them but they confuse me further!
If you are going to pay yourself something for your time then you would need to issue an invoice dated prior to Sept 09 to the company. You would then need to declare this income personally via a self assessment tax return.
But where do I put this on the account document? Does it go under Accruals and deferred income?
Also, I'm a student, if I invoice myself, should I do it so that I don't exceed the untaxable limit I'm allowed? Where do I get hold of this self assessment tax return
I also have to do a HM Revenue and Customs tax return for my company too, any tips for doing that?
Doing accounts for an incorporated business such as yours is not an easy 'complete a form' type of task. There are disclosures on the accounts that change frequently and any small error can result in Companies House rejecting the accounts. The fining culture that exists at the moment is fairly stringent (£150 if late in month 1, £375 if late upto 3 months, £750 upto 6 months erc, and if late two years in a row the fines are doubled!).
You need to prepare full accounts, CT600 (company self assessment tax return) and a Corporation tax computation which all go to hmrc. Abbreviated accounts will need to be sent to Companies House. A limited company has very stringent rules on bookkeeping as there is a lot of disclosure matters. you have to also remember that the company is a separate legal entity from yourself. Having said all that there are often many good reasons for incorporating a business.
Withregards to your invoicing the company. You need to tell hmrc that you are self employed and that you need to complete a tax return. This should be done within 3 months of incorporating (actually the rules have changed to pretty much immediately but most seem to allow the 3 month rule) otherwise there is a £100 fine. You would also need to pay class 2 NIC (though if earnings are low this can be deferred). If you have no other income in the fiscal year(to 5th April) then you can earn up to your personal allowance of £6,475 without incurring any tax.
If the figures you have given in your post are accurate then you would be looking ata corporation tax bill of around £400 and you could take a dividend from the profits less tax (assuming you are 100% shareholder). If you had invoiced the company for £2000 and made the profit zero in teh company, then there would be no CT and potentially no personal tax. You would have to still get all the accounts etc completed aswell as a personal tax return in this case.
