I'm in abit of a pickle regarding ltd company and could do with some advice please.

Mahmood_Reza

Hi Paul,
Like all these matters the devil is in the detail and there is the option to make an error or mistake claim, and I do not have sight of the documents actually filed etc and can thus only make general comments.
Loans under £5k can generally speaking be written off tax free - no taxable benefit to individual; no payoll scheme would have had to be set up if no PAYE due (drawn out < NIC threshold, approx £5.5K); records of some description would have been made & would have formed the basis of the a/c; (d) loans or dividends are normally required to be paid back if 'illegal', i.e. company does not make suffcient profits and a creditor is unpaid. In light of the sums involved, and potential fines and penalties it may be advantageous to wind up the company - would not envisage any issue with HMRC, all fines & penalties being against the company and not the individual, and from an HMRC view the sums are not significant (though they would be to most of us).

I am happy to admit in that I am looking at this with my accountants hat on - normal response to a question being "it depends...)

Premier_2

clairibel wrote: »

...So i sent an amended return after speaking to them, but now they have sent it back saying i need:I haven't found them that helpful.

1. A directors report.
2. Full balance sheet
3. Profit and loss account.

I'm really not clued up on this stuff and do not know what to do...i wish i had never started my company as been nothing but stress for me...i was ill informed and i was led to believe by arise it to be straightforward.
....

These are all items that form part of the company accounts; the accounts you also are required to submit to Companies House (although you may be able to provide abbreviated accounts to Companies House, but why produce two different sets of accounts?)

As others say, if you don't understand this, best to get the help of an accountant to do it for you.

clairibel

Hi again,

I have spoken to some accountants and min quote was £250 eek! I just don't have this spare as i am currently not working.

I have spoken to business link and they have sent me some info on ltd companies set up and suggested a bookkeeper, as can be more cost effective.

I also spoke to HMRC and she basically said that the invoices i sent they could not understand or work out from.

Mahmood I think your right about the arise structure, works for them and thanks for your input, me and my hubby are going to try and do it ourselves, i used to be self employed and he always did my tax stuff....i know i should learn myself the numbers scare me . I have dissolved the company, did so straight away as i'm not the best at stuff like this.

clairibel

Mahmood_Reza wrote: »

Hi Paul,
Like all these matters the devil is in the detail and there is the option to make an error or mistake claim, and I do not have sight of the documents actually filed etc and can thus only make general comments.
Loans under £5k can generally speaking be written off tax free - no taxable benefit to individual; no payoll scheme would have had to be set up if no PAYE due (drawn out < NIC threshold, approx £5.5K); records of some description would have been made & would have formed the basis of the a/c; (d) loans or dividends are normally required to be paid back if 'illegal', i.e. company does not make suffcient profits and a creditor is unpaid. In light of the sums involved, and potential fines and penalties it may be advantageous to wind up the company - would not envisage any issue with HMRC, all fines & penalties being against the company and not the individual, and from an HMRC view the sums are not significant (though they would be to most of us).

I am happy to admit in that I am looking at this with my accountants hat on - normal response to a question being "it depends...)

Hi again,

How would you write off this as you put it, i will google this info and try to find out, but this is something i could do maybe??? thanks again.

paulwf

clairibel wrote: »

Hi again,

I have spoken to some accountants and min quote was £250 eek! I just don't have this spare as i am currently not working.

I have spoken to business link and they have sent me some info on ltd companies set up and suggested a bookkeeper, as can be more cost effective.

I also spoke to HMRC and she basically said that the invoices i sent they could not understand or work out from.

Mahmood I think your right about the arise structure, works for them and thanks for your input, me and my hubby are going to try and do it ourselves, i used to be self employed and he always did my tax stuff....i know i should learn myself the numbers scare me . I have dissolved the company, did so straight away as i'm not the best at stuff like this.

For £250 bite their hand off! That's really cheap, have you got any savings at all you can dip into? If you haven't got the money then fair enough, but if you can find it somehow it's going to save you an awful lot of hassle.

Mahmood_Reza

Before you part with any cash I suggest the following. If the company has been dissolved (check Companies House) and HMRC have not objected (this would have been posted in the London Gazette) then I would juts write off to HMRC with a covering letter explaining (a) the amendment and reasons; (b) explain that the company has been struck off; (c) has no assets. Liabiility for the tax is the companies, and vanishes when the company does. It may not be necessary to send off amended a/c for the Company and tax return.

The write off means that you record it as a dividend in the accounts - based on the amounts it could be recorded as a wage and eliminate the profit! Remember to include it as income on your personal tax return.

Pennywise

Mahmood_Reza wrote: »

Before you part with any cash I suggest the following. If the company has been dissolved (check Companies House) and HMRC have not objected (this would have been posted in the London Gazette) then I would juts write off to HMRC with a covering letter explaining (a) the amendment and reasons; (b) explain that the company has been struck off; (c) has no assets. Liabiility for the tax is the companies, and vanishes when the company does. It may not be necessary to send off amended a/c for the Company and tax return.

The write off means that you record it as a dividend in the accounts - based on the amounts it could be recorded as a wage and eliminate the profit! Remember to include it as income on your personal tax return.

There's a fundamental flaw in that you've not allowed for corporation tax. The entire amount taken can't be a dividend as it exceeds the "post tax profits", so some of it must be a loan which has to formally be written off or repaid - both with tax and/or NIC consequences. Dividends aren't an expense for corporation tax. HMRC won't just forget the corporation tax because the shareholder/director has taken more than they were entitled to.

As an example, if the company turnover was, say £2,000, then it has a corporation tax liability of, say, £400, leaving £1,600 available to be paid as a dividend. If owner has taken £2,000, then only £1,600 of that could have been a dividend - if they've taken more, then they've effectively "stolen" HMRC's corporation tax and HMRC won't like that and will persue the owner personally.

TM1976

clairibel wrote: »

Hi again,

I have spoken to some accountants and min quote was £250 eek! I just don't have this spare as i am currently not working.

I have spoken to business link and they have sent me some info on ltd companies set up and suggested a bookkeeper, as can be more cost effective.

£250 sounds pretty good to me. Business Link are wrong you do actually need an accountant to do this a bookkeeper wouldn't be any help.

Mahmood_Reza

I agree ref the corp tax analysis & "dividends", hence that's why I suggested classifying it as a wage to wipe out any profits. I have seen HMRC pursue taxpayers for small amounts, based on how the a/c may be drawn up it would suggest an amount that is not worth pursuing (in theory)

clairibel

Hi just an update on my situ and help for others in same pickle

I took timnicebutdims advice and posted my query on the accountingweb forums...i had this reply:

You say the company was dissolved in Dec 2009 if this is the case you do not need to do anything further.
Check on companies house web site re the status.of company.if it is dissolved advise the tax people of this and that is the end of the matter.
Whatever you do do not apply for a striking off yourself as you could end up with personal liabilities.
As you say you have no money try and talk to hmrc and see if they will reach a compromise.


This person also offered free accounting if my phone call to hmrc was unsuccessful....very helpful person.

So i rang hmrc and they have struck me off no issues at all, so thanks Mahmood for your initial advice...very helpful indeed :T

HTH someone else.