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CT600A confusion

Not sure which return to include it with

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Hello there everyone, happy sunny Saturday!
 

I have a question I’m trying to solve and maybe need a nudge in the right direction. So, a company opens on 19/08/2019. The company has to send in two returns in May 2021: one for 19/08/2019 - 18/08/2020 & 19/08/2020 - 31/08/2020 (hopefully this is correct so far)

My question is about directors loan account and a CT600A. The director owed money to the company after 18/08/2020 but also after 31/08/2020 as it wasn’t fully paid until after these dates (other loans cleared via periodic dividends). The amount was the same (£200) over these two periods.

What I’m having slight trouble understanding is which return should the company include the CT600A for? Should it be included on both as the amount was due during both time periods?

Please take it easy on me. This is all still very new to me and I’m really spending a lot of brain power on this

Thanks guys

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By David Ex
28th May 2022 13:59

TrialTimes wrote:

I have a question I’m trying to solve and maybe need a nudge in the right direction.

https://find.icaew.com/

Other professional bodies are available.

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Replying to David Ex:
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By TrialTimes
28th May 2022 14:05

David Ex wrote:

TrialTimes wrote:

I have a question I’m trying to solve and maybe need a nudge in the right direction.

https://find.icaew.com/

Other professional bodies are available.

I did have an accountant, but his disappearing act has put me in this situation. All I’m asking is if the CT600A has to be included on both returns, even though it would be for the same loan..?

Tbh still not sure why my previous accountant filed the two returns.

I really need a little bit of help before I send this over to my new accountant. I’m a micro entity working in the charity sector, so resources aren’t exactly plentiful. Any advice on this issue would be really really appreciated.

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By Matrix
28th May 2022 14:26

Try Tax Aid as some of us do enough pro bono work already.

However why have you borrowed, and not repaid, £200 of the stretched resources?

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Replying to TrialTimes:
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By DKB-Sheffield
28th May 2022 15:21

A little confused here...

You say the accountant (who has disappeared) filed 2 returns - which would sound correct for 2019 incorporation and first period end in 2020 (>366 days).

Why are you, therefore, asking what to file for the 2020 CT returns? Did the previous accountant do them incorrectly? Or did they, in fact, not file them at all? If the latter, the returns are a year late and have substantial penalties.

If this is in relation to the 2021 return that you are preparing to send to your new accountant, I'd let them deal with it.

Neither answer addresses the question, but the question you asked doesn't fit with the scenario you have set out in your subsequent response either.

- Were the 2020 returns filed?
- If so, why are you resubmitting them?
- If they were wrong, who advised you that they were?
- If there was an error, what was it?
- Did the accountant file the CT600A?

If you're actually referring to the 2021 return (and are going to DIY-it), your question is likely to be very different.

EDIT: Returns for 2020 would be 9 months late. I was working from memory of the OP when 'responding'.

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Replying to DKB-Sheffield:
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By TrialTimes
28th May 2022 17:13

Thank you.

2020 were returns filed.

Not resubmitting, just curious now based on previous accountant.

Accountant 2 mentioned the CT600A for a loan I was not aware of.

There were no notes submitted regarding the CT600A, which apparently is a requirement, even if micro ent.

CT600A filed for 19/08/2019 - 18/08/2020.

My question was, if the loan was still outstanding during 19/08/2020-31/08/2020, wouldn’t another CT600A have to be submitted with that period( which it hasn’t been). Maybe not as loan wasn’t taken out during that period.

In any case, I am worried as accountant 1 has left me with very little- it seems on purpose.

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Replying to TrialTimes:
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By DKB-Sheffield
28th May 2022 18:09

Thank you for providing the additional info. This would likely have received a different response.

1. CT600A filed on return 1 is fine. 'Overdrawn DLA' is not unusual. However, there may be tax to pay (see point 4)

2. Yes, loans brought forward should have been included on the stub return but unlikely to be an issue (also see next point) - particularly with the sum involved.

3 You say the loan was repaid after the period end? Was this within 9 months? Does the filed CT600A say it has been 'repaid, released, or written off within 9 months of the year end'? This may explain why there is no CT600A for the second return.

4. If the loan remained unpaid 9 months after the year end, s455 tax would apply - and would need to be paid (and a claim for repayment made 9 months after the year of repayment). Accountant 2 will advise on this.

5. If repayment was made within 9 months of the 2020 period end, the CT600A should have reflected this and no tax would have been due. Again accountant 2 will advise.

6. Computations will have been filed with HMRC (the return wouldn't have been accepted if not). Whether accountant 1 provided them to you is another question. Tbf, and if you have the full accounts (with full P&L), any workings you provided to accountant 1, and your knowledge of the business, it shouldn't be too dificult for accountant 2 to work out the CT600 figures.

In all honesty, I'd just let accountant 2 deal with it. The CT Return is not due for filing 'til August (if you've retained the same year end). The accounts would be due this week... with a reasonable CT accrual. Accountant 2 may find it easier to work it out for him/herself anyway.

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Replying to TrialTimes:
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By Paul Crowley
28th May 2022 18:14

Confused
Accountant 2 IN PLACE and he wants you to ask on here about about CT600A forms, or worse you do not trust what he has said.

CT600A shows movements on the loan and some other matters
Not needed if no movement

If you do not trust your accountant then look up his qualifications and search how long he has been trading (dead easy on companies house) and consider if VAT registered.

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Replying to Paul Crowley:
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By TrialTimes
28th May 2022 19:07

Paul Crowley wrote:

Confused
Accountant 2 IN PLACE and he wants you to ask on here about about CT600A forms, or worse you do not trust what he has said.

CT600A shows movements on the loan and some other matters
Not needed if no movement

If you do not trust your accountant then look up his qualifications and search how long he has been trading (dead easy on companies house) and consider if VAT registered.

Thanks for the advice :-).

No, no one wants me to ask. I am asking just for myself. Yes, I am dubious, so I am asking more questions that I previously did as I cannot afford for this to happen again.

All I’ve asked is whether two CT600a’s were required for the one loan. It was originally filed for the first period, not for the second, is that correct?

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Replying to TrialTimes:
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By DKB-Sheffield
28th May 2022 19:47

I did reply to your post but it's obviously stuck.

As Paul said, one filing should be adequate. If a second was filed, it will just confirm no movement.

My missing post did go into more detail - i.e. the CT600A you have may actually show the loan was repaid within 9 months? One for accountant 2... who will actually see the submission... to sort... we can merely guess.

Also, the CT Return could not have been filed/ accepted without computations. That's not saying you were provided with them but, no computations (should) equal a rejected filing.

Key thing... get the accounts sorted... they are probably due this week. CT filing will wait (you likely have 'til August). Unlikely to be CT to pay if all your work has been the provision of free advice. You may of course owe s455 tax from last year (+ interest).

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Replying to DKB-Sheffield:
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By TrialTimes
28th May 2022 19:58

DKB-Sheffield wrote:

I did reply to your post but it's obviously stuck.

As Paul said, one filing should be adequate. If a second was filed, it will just confirm no movement.

My missing post did go into more detail - i.e. the CT600A you have may actually show the loan was repaid within 9 months? One for accountant 2... who will actually see the submission... to sort... we can merely guess.

Also, the CT Return could not have been filed/ accepted without computations. That's not saying you were provided with them but, no computations (should) equal a rejected filing.

Key thing... get the accounts sorted... they are probably due this week. CT filing will wait (you likely have 'til August). Unlikely to be CT to pay if all your work has been the provision of free advice. You may of course owe s455 tax from last year (+ interest).

Thank you :-).

A lot going on atm, so really really appreciate yours and others advice.

Yes, the account are/will be done. Slightly worried what new one is going to find, but hopefully nothing as I do thankfully have invoices and access to the company bank account.

Had never heard of a CT600 until yesterday afternoon. What a rabbit hole!

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Replying to TrialTimes:
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By Paul Crowley
28th May 2022 16:02

'Tbh still not sure why my previous accountant filed the two returns.'
He did it to save you late filing fees

You are aware that there are time limits?

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Replying to TrialTimes:
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By David Ex
28th May 2022 16:31

TrialTimes wrote:

I really need a little bit of help before I send this over to my new accountant. I’m a micro entity working in the charity sector, so resources aren’t exactly plentiful.

Resources plentiful enough to make loans to directors though. Doesn’t exactly tug my heart strings TBH.

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By Leywood
28th May 2022 15:08

‘All you are asking’ oh that makes it ok then.

Why do you think it’s ok for you to expect Accountants to provide free advice?

Not that we can on here, it’s in the rules.

‘ I really need a little bit of help before I send this over to my new accountant’. Why? That’s what your Accountant will sort. How very odd

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Replying to Leywood:
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By TrialTimes
28th May 2022 15:10

Leywood wrote:

‘All you are asking’ oh that makes it ok then.

Why do you think it’s ok for you to expect Accountants to provide free advice?

Not that we can on here, it’s in the rules.

Just a simple question. I’m just asking whether the CT600A needs to be included on both returns, that’s all.

As for giving free advice. my company has literally been doing that for the past two years to students, many of which are accounting students.

If you don’t know, or don’t want to answer that’s fine, but no need to attack.

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Replying to TrialTimes:
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By David Ex
28th May 2022 22:27

TrialTimes wrote:

As for giving free advice. my company has literally been doing that for the past two years to students, many of which are accounting students.

Hopefully restricting claims for expenses accordingly (assuming that you are carrying on a trade at all).

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By Paul Crowley
28th May 2022 15:52

Seriously, If you used accountant 1 for year 1 and will use accountant 2 for year 2 then do not try to meddle in between.
Any thing you do makes more work for accountant 2, not less.
You do not know the answer, he does
And at £200 nobody including the HMRC cares
If not done correctly on either of the first 2 returns then accountant 2 will just fix it all on return 3
If I was accountant 2, I would not want you do fiddle with anything at all, because it would take me MORE time to sort it out.
You did not mention accountants in the OP. A critical ommision.
Everyone assumed you were trying to DIY

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By Paul Crowley
28th May 2022 16:22

Time limits
Companies house will be expecting your accounts really soon
Why do you leave it so late?
Get accountant 2 sorted out now
It is nearly 9 months since your year end
Accountant 1 has probably not disappeared, he has probably decided that there are just not enough days left to get your accounts prepared and submitted on time
Look on compnies house and check your filing deadline
There is a thing that can be done to delay the problem but accountant has only 2 days to get it done

We all do charity work but expect to be able to fit it between real work, not drop real work because the client leaves us just a couple of days to sort it out

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Replying to Paul Crowley:
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By TrialTimes
28th May 2022 17:03

Paul Crowley wrote:

Time limits
Companies house will be expecting your accounts really soon
Why do you leave it so late?
Get accountant 2 sorted out now
It is nearly 9 months since your year end
Accountant 1 has probably not disappeared, he has probably decided that there are just not enough days left to get your accounts prepared and submitted on time
Look on compnies house and check your filing deadline
There is a thing that can be done to delay the problem but accountant has only 2 days to get it done

We all do charity work but expect to be able to fit it between real work, not drop real work because the client leaves us just a couple of days to sort it out

Oh he’s defo disappeared. In fact, he’s taken a good bit of money from other clients(luckily he did not have access to our bank account). He did however change the email and password to the portal we use. Funnily enough, I did hear he may be working in Thailand now as a boiler room accountant. Whether that’s true I don’t know, but sounds about right

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Replying to TrialTimes:
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By Paul Crowley
28th May 2022 18:04

Sounds to me as if you chose cheapest rather than use a properly qualified accountant
If an accountant uses your portal then he is NOT an accountant and defo not registered with HMRC as a tax agent, probably not insured and probably not paying tax. Defo not complying with Money Laundering rules
But you pays your money, you decide who you want acting

ICAEW or ACCA is what you could choose to look for
But if accountant 2 is in place, leave it to him, provided that you got a proper accountant this time around

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RLI
By lionofludesch
28th May 2022 23:58

I might have missed it but was there just one loan advance or a series of them?

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Replying to lionofludesch:
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By TrialTimes
29th May 2022 08:17

lionofludesch wrote:

I might have missed it but was there just one loan advance or a series of them?

I think they were purchases that came under unallowable expenses. Most were paid off through a dividend, but there was an outstanding balance of £200 (£200 was the amount on the CT600A)

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Replying to TrialTimes:
RLI
By lionofludesch
29th May 2022 08:25

TrialTimes wrote:

lionofludesch wrote:

I might have missed it but was there just one loan advance or a series of them?

I think they were purchases that came under unallowable expenses. Most were paid off through a dividend, but there was an outstanding balance of £200 (£200 was the amount on the CT600A)

Unallowable expenses aren't necessarily charged to your director's loan but I'll avoid that line.

What should go on the CT600A are the loans advanced during the period.

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Replying to lionofludesch:
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By Paul Crowley
29th May 2022 13:24

Sounds like accountant 2 needs to review the first period of account

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Replying to Paul Crowley:
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By TrialTimes
29th May 2022 13:45

Paul Crowley wrote:

Sounds like accountant 2 needs to review the first period of account

So much so. In actual fact, I didn’t start trading until November 2019 (not the incorporation date 19/08/2019). So I’m not sure why there are two tax returns.

What a hell hole. I’m just hoping there aren’t any private loans I don’t know about. Tbh feeling very uncomfortable now.

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Replying to TrialTimes:
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By Paul Crowley
29th May 2022 14:57

Let accountant 2 do the work
There is a big difference between payments for things that are not allowed for Corporation tax and payments that have nothing to do with the company and which are seen as you just using the company bank account for your own purposes.

That was the area that Lion chose not to get involved with

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Replying to Paul Crowley:
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By DKB-Sheffield
29th May 2022 16:19

A simple example of "allowable", and "disallowed"...

A meal out with friends (£200) is disallowed for CT and for the accounts (it's not a business expense). If paid from the company, you'd likely see this shown as a debit to the Director's Loan Account.

A meal out with a client (£200) is disallowed for CT but is a business expense for the accounts. The debit would be 'Entertainment Costs' not the Director's Loan Account.

There are many more examples but, I do find this is one of the more common (and one of the easier to understand).

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Replying to TrialTimes:
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By DKB-Sheffield
29th May 2022 16:14

Firstly, don't feel uncomfortable. If the main worries are a £200 loan and the submission of 2 returns (which may actually be the correct - certainly the simplest - way of handling this anyway), you have little to fear.

Ask Accountant 2 to review this. Whatever you do, if it's a relatively minor issue, don't miss the accounts filing deadline (ignoring CT for the time veing) over a £200 query! You're already pushing it for Accountant 2 to file by Tuesday as it is. Maybe they'll suggest an extension... that's up to you, with their guidance.

You may well be overthinking this and worrying too much about what has gone. I don't know... I haven't seen your figures. The important thing is that it is corrected (by accountant 2), and if it isn't, and causes future issues, you may have a valid complaint against their Professional Body, or a claim against their PII.

TBH, the £200 in itself, is relatively minor. It may be an isolated issue, it may be something larger. If the former, get it corrected (if indeed it needs correcting) and move on.

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Replying to DKB-Sheffield:
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By TrialTimes
30th May 2022 20:36

DKB-Sheffield wrote:

Firstly, don't feel uncomfortable. If the main worries are a £200 loan and the submission of 2 returns (which may actually be the correct - certainly the simplest - way of handling this anyway), you have little to fear.

Ask Accountant 2 to review this. Whatever you do, if it's a relatively minor issue, don't miss the accounts filing deadline (ignoring CT for the time veing) over a £200 query! You're already pushing it for Accountant 2 to file by Tuesday as it is. Maybe they'll suggest an extension... that's up to you, with their guidance.

You may well be overthinking this and worrying too much about what has gone. I don't know... I haven't seen your figures. The important thing is that it is corrected (by accountant 2), and if it isn't, and causes future issues, you may have a valid complaint against their Professional Body, or a claim against their PII.

TBH, the £200 in itself, is relatively minor. It may be an isolated issue, it may be something larger. If the former, get it corrected (if indeed it needs correcting) and move on.

Thanks. Been assured it’s sortable today so hopefully all will be ok.

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