Accounts Figures So Far - Please Advise

liquorice_2

Hi There,

I have an accountant but I imagine I will get charged every time I contact him! so before I speak to him I wanted to check a few things on here (free Advice!)

Story;

LTD Co. Started Jan 1st 2007
2 employees (me and OH)

Invoiced £29,682.00
Expenses (Mostly Fuel, but some meals etc) £7,386.46

My calculation for tax are as follows;

£29,682.00
- My Tax free Allowances (£5,225.00)
- OH Tax free Allowances (£5,225.00)
- Expenses (£7,386.46 - way into the 25p per mile stage!)

= £11,845.54

As a rough guide I want to keep aside 25% which = £2,961.39

Does this seem correct?

I currently have £6k in Business account and am looking at Honeymoons so would be nice to now that i have a few £k extra to spend!

Thanks In Advance.

liquorice_2

I must add, I am mainly asking as that seems very Low, was assuming it would be more like £6k

liquorice_2

This is an online calculator I came accross which seems kind of inline with my workings.....

liquorice_2

Anyone ?

Bean_Counter

What period do the figures above cover? Starts 1/1/07 but finishes when?

The £5,225 for you and other half, is this actually paid or the notional tax free allowance?

Do you have any other income e.g. income from other jobs.

liquorice_2

Hi, this is my only income and currently my other halfs only income.
The total is what I have invoiced / been paid to date.

£5,225 each is tax free allowance (hopefully)

I think the easy question would be;

If i never worked for the rest of the year, how much will i need for tax?

Bean_Counter

You stated in your first post that this is a limited company, so the company profit would be the £29,682 invoiced less the expenses of £7,386.46 giving a profit of £22,295.54 (accountant can advise whether any capital allowances or other reliefs due to the company or not.) Tax at 19% is £4,236.15.

You and OH personal reliefs affect your income calculation not the company's. I assume since you have no other income that you have taken money out of the company to live on during this period. Has this been in the form or dividend, salary, or taking money out of the bank as and when you need it? Or have you lived off savings and left the money in the company?

liquorice_2

I have just been taking out money as & when I need it really, accountant told me to keep money aside and he will do all the workings at the end of the year, working out how much is dividends, salary etc and let me know what I need to pay.

To start with, I had been keeping aside 23% of the total invoiced less expenses but came accross the calculation shown above which took salaries into account thus making the profit lower.

Bean_Counter

In that case I would guess that the figures you would have above is near enough for taking to the accountant. Corporation tax rate used above is 20%, but may be 19% or 20% depending on the period covered.

Obviously the amount of tax to keep back would be higher depending on the level of salaries that you take out.

liquorice_2

Thats cool, thanks for your help/advice.

I think I may just keep more in there and leave it all for the accountant to sort out, no need to take out max for the sake of it.

Bean_Counter

liquorice wrote: »

I think I may just keep more in there and leave it all for the accountant to sort out, no need to take out max for the sake of it.

Probably a good idea. Also speak to your accountant about how much you money plan to take out in the future if and when you get over the £5,225 kind of level.

You'll get the hang of how much tax to allow for once you have been up and running for a while.

As always your accountant knows your business a lot better than anyone on this forum and is better placed to give advice.