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Post Info TOPIC: Start-up Ltd, what to do with pre-funding start-up costs
Claudia Howard


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Start-up Ltd, what to do with pre-funding start-up costs
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I just started my Ltd and I'm not sure what to do with the start-up costs, £150, prefunded by myself including £25 VAT.

First of all I think I need to journal my £1 ordinary share, and the loan to myself (should this be Long term Creditors or short Term, and how should I call the account)?

Should I book:

Cr Ordinary share capital £1

Cr Loan to myself £149

Dr costs £125

Dr VAT £25

I set-up the supplier account. If I account according to the above I don't journal the creditor.

What do you advise?

I use Sage Instant Accounts

Thanks very much.



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gbm


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Hi Claudia,

Yes that looks OK, assuming you are VAT registered - if not, then the £25 VAT is also a cost to yourself, to be included with the £125 costs.

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Nick

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Factsheet | Starting a Business

 
ADAS


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I know I'm pedantic but I really hate net journals. I would:

Dr Expense 125
Dr Vat 25
Cr Directors Loan 150

then

Dr Directors loan £1
Cr OSC £!

I appreciate it makes no difference apart from the quality of the audit trail.

Dodges tomatoes from Nick



-- Edited by ADAS on Thursday 23rd of June 2011 06:43:58 PM

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Tony

Responses are intended as outline only. Formal advice should be sort from your Institutes Technical Department or a suitably qualified Accountant.
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Claudia Howard


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Thanks Nick and Tony - this gives me a bit more confidence (I'm waiting for my VAT registration to come through).
On the Net journal issue - totally agree. Thanks again!!

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Claudia Howard


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I actually have two more questions:

1.) Should I not also include the creditor as part of the booking?

2.) Do you set-up the Director's Loan as part of Long term creditors, and/or would you use yourself as a creditor (or should this be a current account in your own name); to settle more short-term money movements between yourself as a private person and your Ltd?



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