Help!I have a limited company client (my first as Im used to sole-traders therfore very nervous that I get this wrong) that I need to prepare a full set of accounts for shareholders, companies house and completed corporation tax return.I am currently using Sage Instants to trail balance stage however am I right in thinking that this wont do the statutory accounts? What is the best way forward to get the accounts in the correct format and tax software?
ou need to prepare the abbreviated accounts for companies house, and you also need to preapre a set of statutory accounts with iXBRL tags for HMRC. You also need to do a full set of notes to the accounts, Merica do a good checklist for the notes that are required but you will be expected to pay for this.
As for the tax you dont need specific tax software as this can be submitted online through HMRC but you do need to know how to calculate this manually.
This is where Accountancy/Bookkeeping bodies who say that people are able to prepare a profit and loss, balance sheet and calculate the tax are able to take on Limited companies as clients are playing a dangerous game.
For example the ICB tax syllabus, including level 4, makes no mention of Section 419 tax, yet this is a common problem with small businesses whose owners cant see the difference between their money and the companies.
There is no reason why you cant do limited company accounts but you need to be carefull. Software companies like Iris make this a bit more starightforward but you will pay through the nose for this.
__________________
Nick
Nick Craggs FMAAT ACA AAT Distance Learning Manager
Unless you have practical experience of preparing limited company accounts and the related notes and disclosures and preparing limited company tax returns then I would advise steering clear of limited companies until you have the relevant knowledge and experience.
Accounts for limited companies unlike sole traders and governed by Companies Act rules and if you get things wrong then accounts may be rejected and the client will end up blaming you if they get hit wth a penalty for late filing.
If you want to push ahead then i would advise getting VT accounts to do the statutory accounts. It will cover the basics and should be used with a disclosure checklist such as pentana to make sure everything is included. As Nick says you can file the company tax return online using HMRC website but personally i find it a bit cumbersome and i have Taxcalc for filing both personal tax returns and corporate tax returns. You also need IXBRL tagged accounts to submit with the company tax return (VT accounts will tag the accounts for you).
In summary, if you dont have the experience and knowledge of what is needed i would avoid taking any limited company clients on. Sorry if this isnt what you want to hear but better foregoing a fee as to being hit with a legal claim if you get things wrong.
Hi Nick and Mark many thanks for your reply. I am currently AAT qualified with a Licence to do everything but Corporation tax however this is part of my CPD plan. I do have a qualified accountant with his own practice to verify everything I do however I do want to try and do this completely before I hand it over for verification. I really do hear everything you are both saying and understand how complex this can be, I think thats why Im nervous and want to get it right first time.
I currently use TaxCalc for personal tax and did think I would use it for Corporation tax. Ill also have a look at VT accounts for statutory accounts. Many thanks for your advice. Allison
Preparing small non audited limited companies accounts is fairly easy provided you have the appropriate software and knowledge.
I have 15 years practical experience in CA firms preparing accounts for limited companies so i am relaxed about doing them with my own clients on VT with taxcalc to do the tax work.
If you have practical experience preparing limited company accounts then you shouldnt have any problems but if not then becomes more difficult.
