LTD Company / Self Assessment

LTD Company / Self Assessment

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A client was self employmed since many years , he than set up a limited company in 2003. and got vat registration in the name of limited company but no bank account opended.

He used his personal account for the business.

After the year end, the nill account filed for limited company and the business accounts filed under self assessment.

Is any need now to revise the accounts of limited company, where the ltd company was vat registed and all the four VAT return were filed for the limited company.

Rizwan Azed

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David Winch
By David Winch
16th Nov 2005 09:12

The key question

I presume the VAT returns which were filed for the company were not 'nil' returns but actually showed figures of output VAT and sales (and probably also input VAT and purchases).

I think the key question is "Did the company issue sales invoices showing the company name and either its VAT number or VAT charged on the invoice?".

If it did then I think the company carried on the trade. It follows that the VAT returns are correct and the company accounts (which show no trading by the company) and the individual's self assessment income tax returns (which show the trade carried on by the individual) are incorrect and must be amended.

If the answer to the question is "No" then I think the trade was carried on by the individual. In this case the VAT returns are incorrect and the company accounts and the individual's tax return are correct. You then need to consider whether the individual ought to have himself been registered for VAT.

If the trade was carried on by the company but with no company bank account then all monies received need to be debited to the director's current account and all monies paid need to be credited to that account.

David

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