Corporation Tax Fee Advice

daisyboyd24

A friend of mine has asked me advice as I work in accountancy however this is not something I know anything about.

She has a small dog grooming / walking business which was set up officially as a Limited company.

For a year or so she was quite unwell and didn’t do much business. It was costing her money to keep running as she wasn’t making any profit.
She has told me she is behind on her Corporation Tax return – she’s missed 2 submissions and has received letters for quite a large fine (around £6k)

She contacted an accountant to try and get this up to date. Her accounts are up to date however she needs full accounts not abbreviated accounts for her CT61 return and they are advising her it will be around £800.00 per year to get this sorted.

Also it sounds like her paperwork (receipts etc) are in a pickle.
The company has made no money and she doesn’t have the funds. I’m worried she will take a loan out to cover this.

In my mind she can close the company and as a Limited company she won’t be liable for the fees.

Is this right? I don’t know where to send her for advise and I’m worried for her as she is now understandably getting very stressed out as to how she can get this sorted.

I appreciate your advice.
Daisy

AbbieCadabra

some very helpful accountants over on ukbusiness forum if you don't get a reply on here.

did she take advice when she set up as a Ltd. Co.? from what you've said, i doubt this was the best option for her. i'd hazard a guess that owing HMRC anything will stop the Company from just being dissolved as they will object from what i understand. i've never heard of a small Ltd. Co. filing anything but abbreviated accounts, it would be rare that a full audit would be required, is this what you mean?

daisyboyd24

Thanks for your reply.
I'm having a look on the forum you recommended to see if anyone can help there.

Apparently she was told when you submit your CT61, you have to submit full accounts and she explained she only had Abbreviated Accounts. I too thought that was all she needed.

Wywth

How does she produce abbreviated accounts without having the full accounts?

That's the reason I''ve never understood why anyone bothers with producing abbreviated accounts (other than to hide financial information - but I've nothing I wish to hide)

If she owes HMRC, HMRC will probably not allow her to close the company unless she pays them or HMRC are satisfied there really is no money to chase. Potential wrongful trading would be perhaps something they may wish to look into with the help of the liquidator too, as then the directors would be personally liable for debts.

Wywth

AbbieCadabra wrote: »

some very helpful accountants over on ukbusiness forum if you don't get a reply on here.

did she take advice when she set up as a Ltd. Co.? from what you've said, i doubt this was the best option for her. i'd hazard a guess that owing HMRC anything will stop the Company from just being dissolved as they will object from what i understand. i've never heard of a small Ltd. Co. filing anything but abbreviated accounts, it would be rare that a full audit would be required, is this what you mean?

We're a small company and we've never filed anything but full accounts (CBA to produce abbreviated accounts and we have nothing we wish to hide)

Do not confuse full accounts with audited accounts (our accounts are not audited)

Do not confuse small business accounts with abbreviated accounts,

We file full accounts for a small business (hence why they are not audited)

AbbieCadabra

thanks Wywth , that's where my knowledge of the terminology has failed me, thanks for the explanation. we have full accounts prepared, not audited, & only abbreviated accounts filed at Companies House. i wasn't aware that you could chose to file full accounts instead of abbreviated (hopefully i haven't mis-understood what you've explained there!).

sorry for any confusion OP, hope you manage to get some assistance.

edit: i think i'm getting confused here with what we file & what is available to be viewed/purchased from various websites (for a fee, Duedil etc.). We file FULL accounts, but only our abbreviated accounts would then be available to be purchased? is that right?