I seem to have brain freeze!! I have started working for a company which is a subsidiary of a US company.
To show transfers of money coming in from the US - I need to set up another bank account on the system and show transfers accordingly - is this correct? The one thing I have a query about is is that this money will always sit on the balance sheet as a liability - the money never has to be paid back - is this correct?
2. All start up costs - would I code these to the necessary pot ie office stationery or are all start up costs just coded to one code?
3. The company was only VAT registered the other day but I can claim VAT back retrospectively.
I know these are silly questions to some of you guys - but I just want to get it right!!
I might be wrong, but I think I would put the money that comes in from the states in a capital account?
The start up costs would be put in their own categories ( fixtures etc) then when you come to work out the net value on the BS you can show what each cost centre is worth instead of lumping all fixed assets together. Does the company have a threshold of what they consider fixed assets and what are expenses (like, anything below £50 would be an expense because it would be a lot of work trying to depreciate every pen and calculator!)?
I might be wrong here, but I think you can claim VAT up to 4 years retrospectively, there'll be conditions around this that I have no idea about but I would ring HMRC and ask.
Hope this helps!
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Please correct me if I'm wrong... I am only human sucking up knowledge... Sometimes bits leak out!
you should set the money from the parent company up as an intercompany loan, probably within long term creditors. If you have it as a bank account you give the impression that the company has a lot of debt that could be immediately recalled, placing the subsidiary in jeopardy, which the parent company would never do.
You can claim VAT back retrospectively but not on everything. You will need to ring HMRC to be sure but it is definitely worth doing.
Nick
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Nick
Nick Craggs FMAAT ACA AAT Distance Learning Manager
