Help! - Transactions with directors

Help! - Transactions with directors

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I started a Dating Website business on 01.04.12 with first year end of 31.03.13.

I set up a Ltd Company prior to commencing trading, with me as sole director / employee.  From personal funds I paid £100,000 to a web developer for the purchase of a group of dating websites.  As at the starting date of trading, ie 01.04.12, I transferred these websites to the Ltd co.  The transaction in the accounts was debit cost of goodwill £90k, debit cost of websites £10k, credit DLA £100k.

During the year there were a few small transactions to and from the DLA every month but nothing big like the initial transfers-in described above.  The DLA was a credit balance at all times throughout the year, peaking at about £102k early on, but down to a closing credit balance at the year end of approx £85k as I have withdrawn more from the company than has been credited to my DLA.

I'm now doing the CT return and the Full Stat accounts (under FRSSE).  I'm aware that the transactions / contents of the DLA are Related Party Transactions and so need reporting in a note to the Stat accounts submitted to HMRC with the CT return.

My questions are:

1) Is the initial transfer-in of the £100k worth assets paid for by me a 'Transaction with a Director', and does it therefore need a separate note as such in the Full Stat accounts as well as the note I'm going to make re the Related Party Transactions (the contents of the DLA)?

2) Does any note need to be included with the abbreviated accounts submitted to Companies House (my understanding is NOT, as the DLA was a credit balance at all times, and only loans TO directors need to be disclosed in the abbreviated accounts)?  I hope I'm right on this second point as I have already submitted he abbreviated accounts without a note!

Guidance much appreciated, thanks....

Replies (2)

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By johngroganjga
20th Jun 2014 13:55

You are right.  All related

You are right.  All related party transactions are disclosable in the full accounts but only loans to directors are disclosable in the abbreviated accounts.

But you only need one note  - with all the transactions reported - not a separate note for each reportable transaction. 

As an aside, and with the greatest possible respect, you seem to be doing your accounts back to front.  You say you have already completed and filed the abbreviated accounts but you are only now preparing the full accounts.  When you were preparing the abbreviated accounts what did you think the word "abbreviated" on the front meant?

Presumably you are aware that the CT return is overdue and there will be penalties?

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RLI
By lionofludesch
20th Jun 2014 18:19

Order of Play

Yes, you need to prepare the full accounts first.  Only then can you pick out the bits you need for the abbreviated version and the CT600.

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