Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • nuttyarab
    • By nuttyarab 16th Jul 17, 6:08 PM
    • 21Posts
    • 2Thanks
    nuttyarab
    End of year accounts
    • #1
    • 16th Jul 17, 6:08 PM
    End of year accounts 16th Jul 17 at 6:08 PM
    A couple of years ago I started another business (retail shop) which last month I decided to close as it wasn't going anywhere.
    I took out a personal loan to start the business and still have 2 years of repayments to make. The closure of the shop hasn't been enough to settle this loan, only half. How does this show/work with closing the accounts with my accountant. Because technically I'm now showing profit but this is only because I sold goods which I originally purchased with the loan but haven't earned enough profit to clear the loan...... Hope this makes sense.
Page 1
    • silvercar
    • By silvercar 16th Jul 17, 7:26 PM
    • 36,059 Posts
    • 152,307 Thanks
    silvercar
    • #2
    • 16th Jul 17, 7:26 PM
    • #2
    • 16th Jul 17, 7:26 PM
    This question would be better asked on the tax board.
    • jobbingmusician
    • By jobbingmusician 16th Jul 17, 7:34 PM
    • 18,784 Posts
    • 19,088 Thanks
    jobbingmusician
    • #3
    • 16th Jul 17, 7:34 PM
    • #3
    • 16th Jul 17, 7:34 PM
    Happy to move it, if that's what the OP would like.
    I'm the Board Guide on the Matched Betting; Referrers and Jobseeking & Training boards. I'm a volunteer to help the boards run smoothly, and I can move and merge posts there. Board guides are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.

    The good folk of the matched betting board are now (I hope!) supporting Macmillan, in memory of Fifigrace. Visit
    https://www.gofundme.com/running-the-leeds-10k-for-macmillan
    • nuttyarab
    • By nuttyarab 16th Jul 17, 8:29 PM
    • 21 Posts
    • 2 Thanks
    nuttyarab
    • #4
    • 16th Jul 17, 8:29 PM
    • #4
    • 16th Jul 17, 8:29 PM
    Yes could you move it please ��
    • Scorpio33
    • By Scorpio33 17th Jul 17, 4:16 PM
    • 471 Posts
    • 669 Thanks
    Scorpio33
    • #5
    • 17th Jul 17, 4:16 PM
    • #5
    • 17th Jul 17, 4:16 PM
    If the loan is in the name of the business then the assets of the business would be sold to cover the loan. If that is not enough to cover the remains of the loan, the bank who gave you the loan need to be informed, but technically they would be chasing a business that would be shut down, so can't get anything more from the business.

    However, check your terms of the loan, as it may have a clause in the loan that in the event the business fails to repay the loan, then you as owner would be liable. I doubt that is in there, but it is worth checking.
    • sheramber
    • By sheramber 18th Jul 17, 3:59 PM
    • 3,875 Posts
    • 2,882 Thanks
    sheramber
    • #6
    • 18th Jul 17, 3:59 PM
    • #6
    • 18th Jul 17, 3:59 PM
    The OP states he took out a personal loan, not a business loan.
    • uknick
    • By uknick 19th Jul 17, 9:29 AM
    • 709 Posts
    • 313 Thanks
    uknick
    • #7
    • 19th Jul 17, 9:29 AM
    • #7
    • 19th Jul 17, 9:29 AM
    Nutty

    When you say you "technically made a profit", how have you arrived at this deduction? Total annual sales less total annual running costs? Or, did you just use the difference in price of what you paid for an item and what you sold it for? If you have made a true profit, why did you think the business is going nowhere after only 2 years?

    Also, if you decided to close down the business last month, how have you managed to sell it so quickly to know the proceeds don't cover the amount owed on the loan.

    What has your accountant advised? If you don't have one, and I know this may sound like a scratched record, but I suggest you find one before you close the business.
    • sheramber
    • By sheramber 19th Jul 17, 11:46 AM
    • 3,875 Posts
    • 2,882 Thanks
    sheramber
    • #8
    • 19th Jul 17, 11:46 AM
    • #8
    • 19th Jul 17, 11:46 AM
    So you took out a personal loan which you used to buy stock but the loan money os not shown as a debt in the business accounts.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

315Posts Today

3,912Users online

Martin's Twitter