Incorporation but dud accounting records

Incorporation, trf of assets but incomplete accounting records

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Hello all,

New client incorporating from sole trading business. Previous accountant provides incomplete records based on what he gleans from bank statements - used over the years by his firm to do end of year collation and returns.

Back to the problem, final accounts over last three years have no figure for stock and £500 fixed asset BUT on visiting the outlet, there is probably £30K worth of fixed assets, mainly furniture/fittings, computer equipment, work equipment, tills, etc; and stock worth roughly £5K. Most of the stock items are used in the business but about a quarter are bought for sale to customers. Client says all money spent on stock/fixed assets go through bank statement and accountant usually writes them off to expenses. Landed property isn't involved, thank goodness. Not interested in apportioning blame here, just need to find a way forward. It's primarily a hair dressing salon.

Balance sheets over last three periods show average net assets of £6K - all cash. There's a very busy website that generates most of the sales - averaging £75K annually. No creditors or debtors. I'm inclined to just close down the self employment business without formalising a trf to the limited company. However, if nothing else, the website is valuable and a free transfer (same name is being used) from the director to the Ltd company seems too generous. Having mentioned that, there's no point in calculating goodwill because it will be based on what I know to be wrong figures.

What would you do? Start ltd afresh with no 'paper' transfer of assets OR try to tease out what can be used to calculate goodwill? Previous accountant is unable to confirm if capital allowances were ever claimed. He retires this year and has lost all interest in work (and seemingly, life).

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