Including transactions after accounting period

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My first accounting period for my newly set up limited company is from Jan 23 to Jan 24. I had loaned money from myself to the limited company to purchase stock and grow the business, and I now want to repay the loans to lower the corporation tax bill. Unfortunately, the accounting period has now ended. Is it too late to repay the loans and include the transactions in last years accounting period to lower the tax bill? If not, how would I record it in my book?

 

 

Replies (15)

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By nrw2
20th Feb 2024 12:55

Why do you think the company repaying a loan to you will reduce the corporation tax bill?

Your accountant feels like the next call you should make.

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By Truthsayer
20th Feb 2024 12:57

'Is it too late to repay the loans and include the transactions in last years accounting period....'
Yes.
'....to lower the tax bill'
Repaying a director's loan does not lower the tax bill.

It is clear you don't understand anything about these things, so get an accountant now, and put such questions to him.

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DougScott
By Dougscott
20th Feb 2024 13:01

Extend your accounting period to a more sensible date. And get an accountant!

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RLI
By lionofludesch
20th Feb 2024 13:08

Seriously out of your depth if you think that repaying loans will decrease your corporation tax bill. Or that borrowing money will increase it for that matter.

Get an accountant before you get into more trouble.

Nothing wrong with a January year end if that suits you. On the other hand, nothing wrong with changing it if it doesn't.

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Replying to lionofludesch:
DougScott
By Dougscott
20th Feb 2024 13:27

lionofludesch wrote:

Seriously out of your depth if you think that repaying loans will decrease your corporation tax bill. Or that borrowing money will increase it for that matter.

Get an accountant before you get into more trouble.

Nothing wrong with a January year end if that suits you. On the other hand, nothing wrong with changing it if it doesn't.

Gosh, I've just realised the OP lent money TO his company and not FROM his company. He really doesn't know what he's doing does he! To help you OP, apart from the good advice from everyone to get an accountant before you dig a hole big enough to bury you and your company in, then do you realise you can pay yourself interest on the loan to your company at say 8% or more per annum and the loan interest is a tax deductible expense? This may or may not be a good idea in your case and depends entirely on your circumstances however it is a good question to ask any prospective accountant - if they know what they are doing they will go through the various options and probably mention that you would be advised to have a loan agreement and would need to complete a CT61 when the company pays interest.

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Replying to Dougscott:
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By Paul Crowley
20th Feb 2024 16:40

But tax would still be payable on the interest. Company just changes one tax at 19% for a different tax at 20%

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Replying to Paul Crowley:
DougScott
By Dougscott
21st Feb 2024 16:42

Paul Crowley wrote:

But tax would still be payable on the interest. Company just changes one tax at 19% for a different tax at 20%

But recoverable by the director if they are on a low income. I have a client who lent £200k to his company and has virtually no income other than the interest so gets all of the interest back and of course it's an allowable expense in the company.

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Stepurhan
By stepurhan
20th Feb 2024 13:10

The only way that repaying a loan will reduce your corporation tax bill is if you have recorded the loans being made to the company incorrectly in the first place.

This is an error on a fairly simple transaction. Who knows what other errors you have made. Seek paid-for accountancy assistance before you dig yourself an even bigger hole.

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By Open all hours
20th Feb 2024 13:15

Appoint an accountant, take their advice, and having done so put a note in your diary to see them in November so that the next year end won’t come as such a surprise.

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By Leywood
20th Feb 2024 14:35

Oh dear.

A prime example of a little knowledge being a dangerous thing.

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Replying to Leywood:
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By FactChecker
20th Feb 2024 16:25

Where's the evidence of 'knowledge'?

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Replying to FactChecker:
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By Leywood
20th Feb 2024 16:57

True!

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By Paul Crowley
20th Feb 2024 16:37

You should not be trying to DIY if you think this is a sensible question
My advice is not to place electricity points in the kitchen sink.

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Replying to Paul Crowley:
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By Leywood
20th Feb 2024 16:57

& he's back!

Good.

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By Matrix
21st Feb 2024 07:27

You should include the transactions which happened in the first accounting period in the books such as the stock. Your accountant can make these entries if necessary and the tax should be based on your profit after these costs.

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