Filing accounts for a private ltd company.

ashishporwal

Hi & Thanks in advance,
I run a Pvt Ltd Company from my home. It comprises of me as the director and my wife as a share holder + secretary to the company.
I was wondering if someone could guide us regarding completing the company accounts.
As we run the company from our home I use one room from our four bed room house for the company alomg with some amount of water, electricity and gas for that room. A car, one laptop and a computer, a car, firniture and maintainance of that room. We also do some charity work involving the company.
Is there a software which can help us or is there any guidance available. Accountants are asking a huge amount of money to do that plus charging 5% on every expense showed by us.
Please guide.
Thanks

TM1976

Accountants spend years learning how to do this a have to invest time and money staying up to date with developments. There is no way you can learn how to do this properly by asking questions on online forums. I'm not really sure where you get your information on this regarding charging 5% on all your expenses but as a guide you should pay between £500 to £1,500 per year to get this done depending on how complex your affairs are. Expect to get annual statutory accounts, corporation tax returns an tax returns for you and your wife for that money though. This payment will be tax deductable.

I know this isn't what you want to hear but I can't realisticly see how you can do this properly yourself. As a director you have a statutory responsibility to make sure it is done properly though.

In my opinion getting a professional to do this for you will save you more money than it costs in the long term.

ashishporwal

TM1976 wrote: »

Accountants spend years learning how to do this a have to invest time and money staying up to date with developments. There is no way you can learn how to do this properly by asking questions on online forums. I'm not really sure where you get your information on this regarding charging 5% on all your expenses but as a guide you should pay between £500 to £1,500 per year to get this done depending on how complex your affairs are. Expect to get annual statutory accounts, corporation tax returns an tax returns for you and your wife for that money though. This payment will be tax deductable.

I know this isn't what you want to hear but I can't realisticly see how you can do this properly yourself. As a director you have a statutory responsibility to make sure it is done properly though.

In my opinion getting a professional to do this for you will save you more money than it costs in the long term.

I agree with what you say but I have already paid £1200 for it but this 5% extra charge by my accountants have thrown me in a worry as it will shoot the accountants fee for a very small company like me to 2000£ total.

CluelessJock

If you are such a small company and so concerned about accountancy costs of circa £2k why do you have a Ltd company, with the associated costs?

I suggest speaking to another accountant about the bigger picture.

As TM1976 says, proper professional advice can save you in the long run.

You may actually be experiencing that fact now.

Best of luck.

TM1976

I used to work in public practice for quite a few years. For the record I would have said for a typical Ltd co SME 5 years ago I would have expected the fee to be around £1,500 plus VAT. So this doesn't sound unreasonable to me, you could get cheaper if you really went for it. By typical I actually mean quite a small co. like an IR35 trader.

If your accountant has come back and asked for more money I would expect that perhaps your records are a bit messy and it has took him longer than he thought to make sense of them. Realistically you probably would be getting a bottom end fee unless you were presenting imacculate records in the first place.

I'd pay up this year and shop around before next year if you really are dissatisfied, don't expect to save an awful lot though.

Another thing you could possibly do is employ a bookkeeper who knows what they are doing, then you might have something a bit better to give to your accountant in the first place as a book-keeper's time is a bit cheaper. That may not save you any money though if you are already doing it yourself for free.

Pennywise

The question of charges for a small limited company really is the old "how long is a piece of string?". The problem is that far too many people start companies without appreciating the accounting/tax implications - they tend to regard the company bank account as their own money and happily take money with no regard to the legally required paperwork - i.e. is it wages, dividend, expenses reimbursement, etc. Sorting it all out once it's not right takes A LOT of time. The answer is to get the accountant on board before starting the company and getting them to tell you exactly what/how to do things. For our firm, we charge some companies as little as £300 p.a. where their books and procedures are spot on but our worst case got charged over £3k for a single year when nothing was right. I think you probably need to change to a more proactive accountant who'll work with you to get your side of things running properly - an upfront investment that will save costs in subsequent years.

slipp_digby

It is impossible for us on a forum to make a judgement on what is expensive or not without knowing the state of your records. I have never heard of 5% for all expenses but this may be to cover the time sorting through a big box of receipts!

I do my own bookkeeping and pay about £1300 PA for an accountant who I am happy with. Like many professionals, quality and price should be considered.

You probably have a couple of options:-

Go to another accountant (who will load your fees at this point anyway, and probably charge the same)

Stick with your current accountant get your accounts sorted, then look for a new one next year if costs are a concern.

As Pennywise rightly states, lots of people moan about accountants fees but you have to take on some of the responsibility yourself if you want to pay a reasonable rate and this often means spending time at copmany inception to put in place systems to get the records you need at year end.

Look at it this way - how expensive is your time per hour worth. If its more than the accountant pay them to do it and concentrate on running the business.

ciscosurplus

The rules of home office use changed in April 2008, I cant post links but have a look at BIM47825 on the HMRC website. Anything over £2 a week is likely to trigger a full investigation, you would then have to proove everything was exclusively for business use. Having had a full investigation in the past its not worth it!

I claim for IT equipment, desks, chairs etc.


With regards to the car is it company owned or peronsally owned and you claim your miles back, currently the rates are 40p a mile for the first 10K miles (personal tax year NOT company, so April 6th - April 5th) then 25p a mile after that.

If the laptop was bought as a company laptop you can offset some of this against your coroporation tax, have a look at write down allowances on the business link website (again I cant post links yet)

There is plenty of bookeeping software, but it won't tell you what you can and can't claim for, I pay an accountant for this advice.

As for charging 5% extra for your expenses, I have never heard of that, ditch then and get a new accoutant. Mine charges £1400 a year which includes my annual returns, vat returns, PAYE, advice etc.

Ste_C

ciscosurplus wrote: »

The rules of home office use changed in April 2008, I cant post links but have a look at BIM47825 on the HMRC website. Anything over £2 a week is likely to trigger a full investigation, you would then have to proove everything was exclusively for business use. Having had a full investigation in the past its not worth it!

I think that's scaremongering a little. It isn't likely to trigger a full investigation, but it's true that HMRC are looking at these expenses more now.

People needn't worry about it too much, they just have to make sure they can justify what they charge their company for using a home office - the same with any other expenses.

ciscosurplus

Ste_C wrote: »

I think that's scaremongering a little. It isn't likely to trigger a full investigation, but it's true that HMRC are looking at these expenses more now.

People needn't worry about it too much, they just have to make sure they can justify what they charge their company for using a home office - the same with any other expenses.

Yes perhaps over the top, but having been investigated for exactly that I am a little more bias, I used to take the number of rooms in the house and divide them by my office (6/1) then tax gas electric, council tax totals /6, the inspector then decided to go through everything. This was pre-April 2008 too, in the end he allowed me to keep 60% and I had to pay back 40% of it. The difficulty was separating electricity use without proof, for example I have a couple of PCs, laser printers, servers etc, but then the tax inspector said if I could show how much it draws and when I good justify electricity. Also gas was hard as my office isn’t manned 24/7.

While not meaning to scaremonger, I am simply pointing out it can be tricky ground, and the tax advice I have received is that anything over £2 per week is likely to trigger an investigation.

What this should highlight is that the OP should seek specialist advice as this is a potential minefield.

ashishporwal

ciscosurplus wrote: »

The rules of home office use changed in April 2008, I cant post links but have a look at BIM47825 on the HMRC website. Anything over £2 a week is likely to trigger a full investigation, you would then have to proove everything was exclusively for business use. Having had a full investigation in the past its not worth it!

I claim for IT equipment, desks, chairs etc.


With regards to the car is it company owned or peronsally owned and you claim your miles back, currently the rates are 40p a mile for the first 10K miles (personal tax year NOT company, so April 6th - April 5th) then 25p a mile after that.

If the laptop was bought as a company laptop you can offset some of this against your coroporation tax, have a look at write down allowances on the business link website (again I cant post links yet)

There is plenty of bookeeping software, but it won't tell you what you can and can't claim for, I pay an accountant for this advice.

As for charging 5% extra for your expenses, I have never heard of that, ditch then and get a new accoutant. Mine charges £1400 a year which includes my annual returns, vat returns, PAYE, advice etc.

Thanks that was very helpful.:T