I have started to prepare a few accounts with the new FRS102 Section 1A for small companies- and a little unclear on the guidance for director transactions.
It appears that we only need to make disclosure on director remuneration and dividends if the transactions are not concluded under normal market conditions. Whilst it can be argued and demonstrated that a nominal salary of say 11k per annum could be considered as under normal market conditions for small co's and therefore separate disclsoure is no longer required i am unclear with regards to the dividend disclsoure. I am happy to include it as i understand they encourage this and have no problem in doing so as it was in the FRSSE accounts too - but the version that gets submitted to Companies House (being Abridged / Filleted- confused with the differences but just going with what IRIS produce) i note show limited notes as expected but do show the related party notes and the detail on the dividends paid to directors- it is therefore publically available what dividends the directors withdrew and do not want to make this information publically available if there is no need.
Therefore if anybody is able to assist me in understanding this i would really appreciate it.
The software we use is IRIS
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Stuggling with this myself too, fileted accounts for companies house shows corporation tax creditor. While this figure could be affected by payments on account, losses brought forward, late tax from previous years etc it still gives nosey people somewhat of an indicaiton of the companies actual profits over the years.
fileted accounts for companies house shows corporation tax creditor. .
Is that on IRIS too?
Digita is showing 'taxes and social security' (note, not OTHER taxes but does in fact include just VAT and PAYE). CT is included below that, in 'other creditors'.
Then again, Digita also wanted to send in the full P+L and most of the notes, so I wouldn't for a second trust it to get disclosures right. I'm editing it regularly on the basis of disclosure checklists - at least that way if its wrong it'll be MY own fault rather than the software suppliers. It does make me wonder what I'm paying for though............
Is that on IRIS too?
Digita is showing 'taxes and social security' (note, not OTHER taxes but does in fact include just VAT and PAYE). CT is included below that, in 'other creditors'.
I'm using VT, within creditors note I have "corporation tax", "other taxes and social security costs" then "other creditors"! Interesting to hear how different Digita have it, thanks!
I see that VT's corp tax is tagged "CorporationTaxPayable" so not sure who has it correctly tagged if digita have it included in "other creditors".
VT produces just the Balance Sheet and Notes to the accounts (no P&L).
The notes are the full notes, but don't suppose there is anything of interest in there now that dividends is on the separate statement of changes in equity.
Yes, been doing battle with Digita over how to get rid of these so-obviously-unnecessary disclosures on the filleted accounts. Apparently I am also now a programmer as well as an accountant.
Makes me wonder what I am paying for too - a letter to Digita is under concoction.
I use VT and not looked thr new FR102 disclosures yet. However testing taxfiler and looking at the demo version in tax filer is showing accountants report and company details going to CH.
I use VT and not looked thr new FR102 disclosures yet. However testing taxfiler and looking at the demo version in tax filer is showing accountants report and company details going to CH.
I agree, as well as the statement of changes in equity report and corporation tax amount in creditors.
http://www.smallcompanyreporting.co.uk/media/ILLUSTRATIVE%20SMALL%20COMP...
Found this PDF on the internet which compares the changes. Its a handy document. If you look at page 17 detailed creditors breakdown is not required under FR102.
Thanks for the replies but does anyone have any thoughts on the director dividend disclosure under the related party notes. I am of the opinion that we omit them on the grounds that the transactions were carried out on normal market conditions. The frs102 only requires the disclosure if the transactions with related parties were not under normal market conditions
It seems definition of 'normal market conditions' can be subjective.
This article may explain a bit more.
However, I agree with you. If dividends are provided as 'normal' i.e. arms length then no need to disclose. The issue is more to do with minimum salary that directors pay themselves.
https://www.accountingweb.co.uk/business/financial-reporting/frs-102-cre...
I'm preparing my first set of accounts under FRS102 section 1A. It is simultaneously also my first set using Taxcalc, having moved from IRIS.
My main issue is the disclosure that will be on the public record at Companies House. Although there is guidance available from ACCA and others on the full a/cs disclosure, I can't find a guide to the disclosure for the a/cs that go to Companies House.
Since starting to type this,I have now found this that appears to answer my queries and hopefully some of the others:
https://companieshouse.blog.gov.uk/2016/10/06/accounts-advice-for-small-...
If the client company meets the micro entity criteria, this seems the simplest way of making the least disclosure at Companies House. Main criteria for most companies will be turnover £632,000 or less. This covers nearly all - but not quite all - of my clients.
I am preparing my first set of FRS102 accounts (client does not qualify as micro).
It seems that filleted accounts include the corporation tax creditor which is too much information as far as my client is concerned.
However per the link provided by Accountant in London, this disclosure is not require for abridged accounts. So the only way to reduce the disclosure is to prepare abridged accounts (with the approval of the shareholders).
Do others agree?
To the OP - I have no intention of disclosing salary or dividends.
Per Mr AWOL above Digita includes corporation tax creditor in other creditors and therefore not visible to prying eyes in the filleted accounts.
Using Taxfiler or VT myself so looking into this possibility to get around the same issue.
I'm also grappling with this issue.
Majority of my clients are Micro so I could happily use FRS105 and avoid the Dividend disclosure issue.
The accounting format is awful though and I'm almost embarrassed to produce them. Let alone what a future lender or investor would make of them.
But most of my company Director / Shareholders don't want their remuneration disclosed at Companies House which I fully understand. No-one on PAYE would have such details disclosed and made freely available.
What to do??!
I have been preparing the "Fillited" accounts that removes the directors report, p&L and associated notes.
I understand too that no disclosure is required regarding directors remuneration providing it is paid under normal trading conditions. We just have a file note supporting this decision. We declare the dividends as this is encouraged by the FRS102 Section 1A, and this is shown on the Statement of Change in Equity and again is removed in the filleted accounts. I have been to a few training courses and this is the format the presenter has discussed. it follows the FRSSE2015 rules where it was disclosed in the full but not the abbreviated. The presenter understood the profit privacy we all want to achieve for our clients. You also need to be aware of the reconciliation note on transition to FRS102 if your software provides this and refers to net profit
Our software - IRIS shows Corporation Tax creditor within Taxes and social security so does not show it separately. There is nothing in the FRS102 that says it should be separate i have searched and searched so not sure why some software companies are doing this.
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