Jay, clear last year's accountancy fees with a debit from drawings. Next, debit accountancy with this years fees and credit current liabilities. When HMRC informed you; they meant this years fees within the accounting period of the Return.
Shaun has touched on this on the Depreciation thread if you want to read up on it and here's another link which may help.
Dont know why you want to clear last years accountancy by Dr drawings? It is a valid expense that can be claimed.
Appears that in previous returns the accountancy fee hasnt been accrued but accounted for as what was paid in the year ie last years accountancy fee.
What you will need to do is
Dr Accountancy
Cr Accruals
with your fee for the 2012 return.
This will mean you will have 2 years accounting fees in the one return ie 2011 accounts and 2012 accounts. This is fine as will need to be one year where 2 years are included if you move from cash to accruals accounting.
Yes, Jay might be able to tell us if a claim for accountancy was completely omitted in the opening year, or at least some earlier year. Thanks for pointing that out though, because it would be a bind to have to alter the 10-11 Return. I was taking it that a fee had been claimed every year, even if it was not quite known why.
Sounds like if fees relating to 2009/10 where in the 2010/11 return and paid in sept 2010 that the previous accountant has been preparing the tax return on a cash basis rather than an accruals basis. ie putting through in the tax year the fee paid in that tax year irrespective of what period they were due for.
You could carry on this practice or if you want to accrue your fee in the 2011/12 tax return then you will have 2 accountancy fees ie the one for 2010/11 which will have been paid in tax year 2011/12 and your own fee which you are accruing.
This raises the question as to how much of the 2010/11 tax return has been prepared on a cash basis rather than an accruals basis.
i would ask the previous accountant for a detailed breakdown of all the figures in the 2010/11 tax return as if things like accruals, prepayments, debtors and creditors havent been recognised then this will have an impact on the 2011/12 or will mean you need to amend teh 2010/11
