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error on companies house accounts

error on companies house accounts

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I've submitted my companies abbreviated accounts  to companies house, but i failed to notice that the dividends was actually a credit movement for the year, more funds were put in than taken out, so at the moment it forms part of the profit and loss in the balance sheet.

I'm trying to submit my corporation tax return and it won't let me put a negative dividend, so I need to move the figure into creditors.

Will I just be able to resubmit a change to companies house without penalty?

Once I submit my return to hmrc it will differ from the return I've provided to companies house.

Any advice would be great thanks

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30th Mar 2015 22:49

Very unlikely

Hi Catherine - I'm struggling to understand how you can have a negative dividend, I've never seen one.  There can be dividends that go through that turn out to be illegal and so are repayable, so that could I suppose lead to a negative figure but, in most cases that would be a prior period adjustment to reserves.

So if, as you say, it's just more money coming in than going out, then money in will tend to be a loan of some kind, not a negative dividend.

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30th Mar 2015 22:55

yes that is it, its turned into a loan, but it all went through the dividends account on our accounting package.  I didn't move it into a loan account as I put more funds into the business than took out,

i'm just concerned at how I go about correcting the accounts as I've submitted to companies house but I need to correct the submission to them

I also need to submit to HMRC my tax return which I can submit correctly.

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31st Mar 2015 10:30

Prior post

catherine2255 wrote:

HI,

I am a CIMA Qualified Accountant, after working for 5 years after qualifying I am considering setting up my own practice. 

The only problem is I have no experience in practice at all.

I hope the "dividend" error isnt for a paying client...

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31st Mar 2015 10:50

Overconfident

catherine2255 wrote:

yes that is it, its turned into a loan, but it all went through the dividends account on our accounting package.  I didn't move it into a loan account as I put more funds into the business than took out,

i'm just concerned at how I go about correcting the accounts as I've submitted to companies house but I need to correct the submission to them

I also need to submit to HMRC my tax return which I can submit correctly.

It's nice to see that making such basic, rudimentary errors hasn't discouraged you from continuing with your DIY accounting.

Do CIMA not explain the differences between dividends and loans any more ?

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31st Mar 2015 00:37

I would suggest that you deal with error by way of a prior year adjustment in next year's accounts. Perhaps get an accountant to deal with them to give you peace of mind. In the meantime just ensure that any error that affects the profit is adjusted out in the corporation tax computation.

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31st Mar 2015 00:40

Dividends

Reading between the lines are you thinking that money you draw out of your company is described as a "dividend"?

If so, I would advise you that it is a bit more complicated than that.

The danger is that preparing the company accounts yourself from your accounting package may result in your declaring too much or too little profits for corporation tax and income for income tax.

I appreciate that an accountant will charge you for preparing the accounts & tax returns correctly & giving you advice - but it may be money well spent!

RM

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By mrme89
31st Mar 2015 07:31

From previous posts, it looks like they are charging for their services as an accountant.

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31st Mar 2015 10:06

If you can't beat 'em

mrme89 wrote:

From previous posts, it looks like they are charging for their services as an accountant.

I think I'm going to start offering cosmetic surgery as one of my services. I'm led to understand it's quite a lucrative business, and how hard can it be? I have a box of aspirin and I can sew, so it'll be fine. My new combined tax return and facelift package will be called "Tuck & File" (TM).

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31st Mar 2015 08:38

Amended accounts

Generally once accounts have gone into HMRC, I go with John's suggestion of putting through a prior period adjustment in next year however, as you have spotted it so soon, and can still submit corrected accounts to HMRC, I'd prepare amended accounts and send them to Cos Hse.

Here's their guidance page.

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31st Mar 2015 11:28

Come, come, folks....

There's no need to be so supercilious.
We've all committed 'howlers' in our time, and if people come on here admitting a mistake has been made and looking for guidance to rectify it, we should give it non-judgmentally and be grateful the error wasn't ours. It could be next time.
Let those who are without sin cast the first stone.

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By mrme89
31st Mar 2015 11:43

Sorry

Cuchulainn wrote:

There's no need to be so supercilious.
We've all committed 'howlers' in our time, and if people come on here admitting a mistake has been made and looking for guidance to rectify it, we should give it non-judgmentally and be grateful the error wasn't ours. It could be next time.
Let those who are without sin cast the first stone.

 

But a practising accountant should never come out with the words 'negative dividend'.

They should also know how file amended accounts.

 

There is a difference between committing a howler and just not knowing.

 

Like Miss Accountant said, I hope they are doing this for their own company and not that of a paying client.

  

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01st Apr 2015 12:06

Not extensive

mrme89 wrote:

They should also know how file amended accounts.

  

I have to say that my experience in filing amended accounts is not extensive.

I'd be more than happy for that to continue.

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31st Mar 2015 11:34

Fair enough

I apologise, Cuchulainn.

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31st Mar 2015 11:49

Error and understanding

Putting something in the wrong place so as to end up with negative dividends - an error that any of us, being human, could make.

Not understanding why that is wrong, nor understanding that fixing the problem is likely to require more than just "move the balance to creditors" - No longer a one-off error anyone could make. This is a fundamental issue with the way transactions are being recorded that will affect every set of accounts the OP prepares. The correct treatment of money in and out of a company is not exactly a complex and obscure rule either.

Assisting someone doing the latter to carry on without such basic accounts knowledge is not doing them any favours.

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31st Mar 2015 11:51

An apology

<apology>I must apologise for any offence I may have caused to the OP.  I genuinely thought she was an owner / manager of a small business & not an accountant.</apology>

<rant>Perhaps my view has been coloured by other accounts (obviously DIY efforts) which I have seen filed at Companies House - including a set in which the share capital fluctuated up & down like the capital account balance in a sole trader's accounts.

There is a problem where business-people who have no accounting knowledge prepare DIY accounts using off the shelf accounts packages & make horrendous errors which nobody in authority picks up or apparently cares about.</rant>

RM

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31st Mar 2015 13:19

I'd rather err than be perfect

There will always be someone out there who will expect you to know something you don't and this might be reasonable, unreasonable or, as put by Cuchulainn, they may just be more supercilious than you are.

Unlike many of you, it seems, I have no detailed knowledge of the poster, her abilities. her qualifications or even the exact details of how the accounts were prepared and I don't care, she asked a question on accountancy to a bunch of accountants.

There are references above, and on many other threads, to DIY accounts. Although it may be obvious (well it is to me), it's worth pointing out that there is nothing in law that requires a business to employ an accountant, in fact there is so much guidance and information out there people are actually encouraged by the government to gain knowledge and DIY.

So, whether they do and make a pig's ear out of it or not, having a go at them is completely missing the point, they don't make the rules (or lack of them).

For those able/willing to lift the lid their box, there is, in fact a lateral view to this.  

A person has a go at DIY, makes a mess, or hits a brick wall and thinks "I know I'll ask/find an accountant to help me".  They Google, land on this site, see some of the "up themselves" comments and decide that all accountants are like that, thus denying a nice little earner to a fellow professional. 

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01st Apr 2015 00:48

Pigs ears and silk purses

Paul Scholes wrote:

So, whether they do and make a pig's ear out of it or not, having a go at them is completely missing the point, they don't make the rules (or lack of them).

Once again you try to grab the moral high ground.

I just cannot understand why you think it is acceptable that somebody who is taking money to perform an accountancy service for a client should be allowed to demonstrate that they are making a complete hash of it and yet not get censured on this site. Time and again you seem to be sticking up for posters who clearly shouldn't be charging fees when they do not have a basic understanding of what they are doing.

Since you do think that way, it is of course your perfect right to defend them, but please don't do so by constantly sniping at those of us who think that these people should not be encouraged to continue to practice in this manner.

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01st Apr 2015 14:40

Alternate possibility

Paul Scholes wrote:
A person has a go at DIY, makes a mess, or hits a brick wall and thinks "I know I'll ask/find an accountant to help me".  They Google, land on this site, see some of the "up themselves" comments and decide that all accountants are like that, thus denying a nice little earner to a fellow professional.
They think about getting an accountant. In doing a search they find this site and decide to try their luck. They cannot believe it when someone helps them out here for free and decide they don't need an accountant after all, thus denying a nice little earner to a fellow professional.

Both scenarios are possible. We clearly have differing views over which is more likely. I personally cannot help thinking that someone that only gets "up themselves" comments as you put it still has the same problem afterwards. Their only choice if they want to fix it is to see an accountant whatever their view of the profession. No doubt you can come up with a similar possible rebuttal to my scenario. Neither of us can prove their speculation is correct.

So I'll respect your right to give answers for free to all and sundry if you respect my right to tell people in no uncertain terms when I think they are clearly out of their depth.

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31st Mar 2015 13:58

"They should also know how file amended accounts."

Oh well - that's me knackered then.

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By mrme89
31st Mar 2015 14:16

Holier than thou

Paul, I'm not sure why you have to make sniping comments towards members who have a different opinion to yourself.

 

You seem to ignore members actual gripes and replace them with something different. Nobody gives a toss if someone does their own accounts and we all know that there is no law to say someone must use an accountant. What some members disagree with is giving these people free advice on a forum that is supposed for people involved in the accountancy and tax professions when there are more suitable platforms. But now Sift have clarified who this site is for, it shouldn't need clarifying again, should it?

 

 

 

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