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You are clearly completely out of your depth and the best advice I can give is that you should stop trying to do your own accounts now and take your records to an accountant.
Good advice
That's good advice from John.
Is it fair to say that you haven't done the full accounts or CT600 form yet ?
Ask your accountant for help.
If your accountant is stuck they can ask the question on this forum and there will be lots of willing helpers.
If you do not think it's worth having an accountant it might appear disrespectful. I have yet to see the accounts of a limited company prepared by a non-accountant to be even close to correct.
You can't have fixed assets on the balance sheet and listed as expenses on the P&L. You need to go back to your accounting system or software and produce a set of accounts that balance before attempting HMRC's CT600 form.
I suspect your problem is lack of double entry
I suspect your problem is a lack of double entry when preparing the figures you are attempting to use, this has resulted in the balance sheet not matching with the profit and loss account.
In essence:
Firstly the fixed asset purchases do not go through the profit and loss account for the year. They are debited to the fixed asset account and credited to however they are paid (Bank/cash/Director's loan a/c)
The entries for things like stock/debtors/creditors probably adjust from the profit and loss heads they cross relate with, debtors with sales, creditors with purchases/expenses, stock with purchases
The retained profit or loss in the balance sheet is made up of b/fwd opening balance add profit after tax/ deduct loss after tax, deduct dividends paid.
You do not have a hope of preparing accounts without :
1. Embracing double entry (every debit has a credit)
2. Understanding the different accounts and which transactions post to which accounts and why.
The advice given to get an accountant needs repeated, you either understand accounting procedures or you do not, your post indicates you do not and therefore either need to teach yourself or pay someone who does understand what they are doing.
Adjust depreciation/stock
Thanks for your replies
Well the business is so small i'm going to have to learn the hard way about accounting principles.
I've realised what my mistake was. I'd taken the £550 of computer equipment purchased and the stock remaining as expenses in the P-L account. Clearly this is not what to do.
So now I have the balance sheet balancing. And £567 profit on the P-L account
I'm stuck now however on the Annual Investment Allowance of £550 for these computer items. It comes under Plant and Machinery if I'm correct, but there are a host of boxes (I thought being a micro-entity was supposed to be easy!)- can anyone list the boxes that must be completed? I've put the same amount of 550 in CP80, CP88 and CP253
Thanks
ps i do take the points on an accountant and will get one as soon as I can
The stock remaining is actually a credit to the profit and loss, in effect Dr Stock (B/Sheet) Credit Purchases/Cost of sales( P&L)
Re the computer equipment, in the accounts you need to depreciate this over its useful life (I tend to use 3 or 4 years re say laptops)
So Dr Depreciation Charge (P & L charge) Credit Accumulated Depreciation (Balance Sheet) The net of the Fixed Asset Cost (550) less the accumulated depreciation is shown on the balance sheet, the details in a note to the accounts.
For tax within the CT 600 return the depreciation is added back to the profits and then the AIA claimed reduces the taxable profit (Shown in the tax computation sent in with the CT600), i.e. accounts profit and tax profit are not the same figure. Sorry cannot help you re box numbers, I use third party software to prepare/submit accounts and tax returns.
Trust this helps.
However be aware, just because accounts balance does not mean they are correct.
(sorry, last point already made above)
MP
I thought being a micro-entity was supposed to be easy!
Nope. That's just what some foolish Dunbartonshire MP thought.
Micro entity accounts are just about giving minimal information to the public. HMRC will still want full shareholder accounts - even if the shareholders don't.
If the business is so small that it can't afford an accountant, why did you set up a Ltd company?
Unfortunately, just because things balance, it doesn't mean they are correct.
Your post is concerning, and that's just the problems you know about.
Great point.
If the business is so small that it can't afford an accountant, why did you set up a Ltd company?
A cracking point from mrme89.
A man's got to know his limitations
Well if you really want to know why i set up a limited company- i'm doing some business in Spain. In spain to be operating as a company you have to pay at least 300€ 'autonomo' every month irrespective of your income. By registering in Spain as a non-resident ltd company without permanent establishment in Spain I am able to buy and sell in Spain without having to pay almost 4000€ per year before earning anything. As work comes through in the UK too- I declare all operations both in Spain and UK to HMRC. Whereas in Spain I simply have to declare the buying and selling that takes place in Spain with a relatively simple VAT declaration every quarter (In Spain all businesses, no matter how small, have to collect VAT for the government, nice). All this wouldnt have been possible as a UK self-employed person working in Spain due to the spanish system.
However, I didnt anticipate the accounting in the UK to get complicated.
Do you really have to depreciate the capital for a couple of tablets and a laptop?? I mean one of the tablets has already broken- cant I simply claim the entirety as AIA?
The AIA is what goes through the tax computations, the depreciation goes through the accounts (but is not a deductible cost for tax purposes) Subject to particular rules the AIA is claimable in the year of purchase, where the complication arises is that the accounts treatment does not accord with the accounts treatment.
Depreciation policy is subjective and ought to be a reflection of the annual benefit to the business of using the asset.
Where an asset ceases to be used by the business then an adjustment is made within the accounts and a gain/loss on disposal for the asset is accounted for within the accounts. (the gain /loss also needs adjusted for tax purposes) Any proceeds (if any) received for the asset needs accounted for within the capital allowances computation for tax and may give rise to a balancing allowance or balancing charge for tax.
I have no idea what your own line of business is, but if it has specialist skills/knowledge I doubt us accountants would as laymen expect to perform it well; in similar vein we learned what we know through education, training and experience and are rightly sceptical that you can, as a layman without that education/ experience, correctly prepare your own accounts and correctly account for the related tax.
The recently revealed international dimension of your business gives further fuel to my doubts, international tax is not for the faint hearted.
In the words of Clint, "A man's got to know his limitations"