Limited Company Tax Return Issue

Limited Company Tax Return Issue

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I am in the process of filing my first year accounting period for my limited company and after spending many hours of reading all the information on HMRC’s website and speaking to HMRC on the phone, I am more than a little confused as to what forms I should be filing in addition to the CT600. Am I an employer who employs myself? How can I be self employed and also an employee??

Firstly, enlisting the services of an accountant is not an option for me as I simply can’t afford one but seeing as my accounts are extremely simple and I have done my own tax returns before, I should be able to get my head around this...if someone is kind enough to spare a little time to explain things in basic plain English

Here’s the background: I have been self employed for many years, (sole trader basis, no employees, just me!) And have always done my own book keeping/accounts/tax returns. In April 2011 I had a career change and began working from home as a virtual customer service advisor. The work is provided via a company called Arise. This is on a self employed basis and you must set up a Limited Company. Basically, Arise pay me for the hours I work, paid into my business account, and this is what I use for my wage and to cover any expenses.

I keep my accounts very simple. There are a number of expenses I could claim (percentages of this & that) but don’t because my income is low and so is the amount of tax to pay, so I just don’t see the point in complicating things for the sake of paying a few pounds less in tax.

Accounting period is for 01/04/2011 to 31/03/2012

Revenue 7507.90 - total of all payments received from Arise

Wages 7068.00 - amount paid to self, purposely kept below the employee thresh holds for tax and national insurance, to keep the accounts simple and perfectly acceptable considering the amount of revenue anyway.

Expenses 344.93 - the only expenses claimed are those necessary for me to do my job (computer equipment/software/repairs & printing)

As you can see the accounts are very simple...and income very low, hence the reason why I have to (and want to) do this myself.

So, I have completed the CT600, using the software provided by HMRC. Fairly straight forward, although I was thrown by the ‘accounting policies’ part and probably haven’t done that quite right.

The question now is what other forms do I need to fill in to complete the process? I have received a SA103 but I’m not sure that this is the correct form to file. I have phoned the corporations tax office a few times for advise but based on their information I should be paying contributions for my employees, doing something about directors dividends, filling in self assessments, filing a self employed tax return and requesting employee tax codes (???)

Please, will someone just point me in the right direction, then I can get it right, pay what I need to and forget about it for a year!

  

Replies (112)

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By David Franks
06th Aug 2012 23:40

?

I think this illustrates why people need to pay for professional advice. The potential for fines can exceed the cost of an accountant, unless people are happy to keep advising for free.

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Replying to legerman:
By petersaxton
06th Aug 2012 23:52

There can still be problems

David Franks wrote:

I think this illustrates why people need to pay for professional advice. The potential for fines can exceed the cost of an accountant, unless people are happy to keep advising for free.

Even if people advise for free the advisee still has to understand the advice!

It's more sensible if the professional advisor just does what's needed rather than trying to educate somebody which can quite often be impossible.

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Replying to legerman:
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By mackthefork
07th Aug 2012 00:03

I read this whole thread.....

....and it says nothing about anything, I'm off for a late night lobotomy, two for the price of one, anyone? it's on me.

 

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By petersaxton
06th Aug 2012 23:50

Julie

"I have already filed my accounts with Companies House"

What made you say this?

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Replying to ashbury:
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By User deleted
06th Aug 2012 23:56

It was ...

petersaxton wrote:

"I have already filed my accounts with Companies House"

What made you say this?

.... the annual return she filed, a common mistake people make, confusing the AR with the accounts.

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By petersaxton
07th Aug 2012 06:16

It is a very common mistake

Some of my clients say to me that they have received a letter from Companies House asking them to file their company accounts. It turns out the letter has asked them to file their company annual return.

I'm never understood why anybody would change the terminology. If I get a letter from somebody and I tell somebody else what was in the letter I would say what the letter said not use different words. This would only cause confusion.

Other clients say to me that they have received a letter from Companies House asking them to file their company annual return but they think a company annual return is the same as company accounts.

At least these clients have wisely employed an accountant and no harm has been done because I am able to resolve the confusion.

Julie has taken the confusion a stage further. She has submitted an annual return yet called it accounts despite an annual return being totally different to accounts.

She goes on to say: "And it's not a case of getting confused during these calls as I write down everything. I also have the above in black & white from companies house."

I don't think she has it in black and white from Companies House because Companies House will have referred to ANNUAL RETURN whereas Julie is referring to ACCOUNTS. This is what I meant about Julie getting confused. I hope she now realises that she has been confused. It is the first step towards getting things right in the future.There are many other things a company director and shareholder has to do and I would expect most of these would be done incorrectly by somebody who is not knowledgeable and experienced.

Julie thinks that reading and a few phone calls will solve everything. Unfortunately, the free advice she has available to her from Companies House and HMRC is provided by people who don't understand and/or care whether she understands what is being said to her or what confusion may result.

If so much can go wrong over the two simple issues of a company annual return and employer registration then what other problems lay in store for Julie?

Julie says she can't afford to use an accountant. I would say she can't afford not to.

 

 

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By Olando
07th Aug 2012 11:45

Companies House filling dates confusion

For accounts that need to be filed with CH there is a difference between the "made up to" date and the "due by" date.

Eg, I have a company incorporated on 24 July 2012, it's accounts should be made up to 31st July 2013, but are due by 24 April 2014.

Similarly, the AR is made up to 24 July 2013, but due by 21 August 2013.

I'm sure Julie's date of the 20th month will be the "due by" date - the deadline for submission - for one or the other and there is no mistake in the CH letter. (Though there may be some confusion about whether we are talking about the AR deadline or the accounts deadline.)

 

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By petersaxton
07th Aug 2012 11:52

Companies House error

"I'm sure Julie's date of the 20th month will be the "due by" date - the deadline for submission - for one or the other and there is no mistake in the CH letter."

Although what you say makes sense, Companies House appear to have got it wrong and the due by date is not 21 months after incorporation.

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By juliemagee
07th Aug 2012 12:09

Not confused

I did not get confused between my CH accounting period and my annual return. I filed my AR in feburary. I know the difference between annual accounts and annual return, I am not as stupid as some of you assume!

And there was an error with CH, this has now been resolved and my accounting period has also now been extended to 31/03/12 to align with HMRC. Next year both the accounting periods will be the same...although the AR period will be different, of course.

 

 

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By petersaxton
07th Aug 2012 12:34

February or March

"I filed my AR in feburary."

According to Companies House you filed your AR in March.

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By petersaxton
07th Aug 2012 12:47

Companies House appear confused, though!

 

“I did not get confused between my CH accounting period and my annual return.”

Maybe you haven’t got confused between the two. Lots of people do, though.

“because Companies house have given me an accounting period of 31.01.11 to 20.01.12 with a dealine of 20.10.12.”

I don’t know why Companies House would say that because your company record says the first accounting period is from 20/01/11 to 31/03/12 with a due date of 31/10/12. I do agree with you that the deadline SHOULD be 20/10/12 but Companies House appear to have made a mistake on their website.

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By mydoghasfleas
07th Aug 2012 13:28

Poked with a pointy stick

I hope you take all the advice above as it is meant.  That is - Helpful.

As you see from the number of responses it is incredible what happens to accountants when they are on some down time and a query like yours pokes them with a pointy stick.

Given the number of issues involved in a company, the advice to have advice is correct.  The important thing, as you probably noticed, is the variation in the quality, standards and accuracy of waht you might get.  Shop around for service not price, you want someone who has the knowledge and the experience to do the job.  If you get it wrong there are penalties from all directions; if the accountant gets it wrong their professional indemnity insurance is all very well but then you have even more problems to contend with. 

Do not rely on telephone conversations with CH or HMRC staff.  Most of the time you are getting responses from people trained to handle calls; a little knowledge is dangerous.  There may be some who are better than others but do not bank on getting hold of a good one.

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By asking
08th Aug 2012 11:23

there are a lot

of comments here saying the same thing or bickering about nothing.

I suggest you get an accountant. It will not cost much at all and will take the questions away from you. See what they do - then, when you understand the concept of a limited company, maybe consider doing it yourself in future.

At the moment, a little knowledge about a lot is clearly getting you nowhere.

I am not even going to attempt answering your questions as they are so basic it will be counterproductive. If you knew a little more, you would have more questions to ask,  and so on.

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By Eric T
08th Aug 2012 11:35

I find this whole series of posts from Julie almost shocking. She knows so little of what is involved that it is absolutely clear that she doesn't know what she doesn't know.

 

She needs to find an accountant as fast as she can. As someone else has said, she is on course to be paying fines that will easilly exceed the fee an accountant would charge for looking after a small company like hers.

 

The so called advice she has received from official sources has been appalling. And even where it may have been accurate, she has completely misunderstood it.

 

Arise should be shot for insisting that their "staff" operatre through limited companies. In Julie's case, this appears to be wholly and absolutely inappropriate.

 

And don't mention IR35.

 

 

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By petersaxton
08th Aug 2012 11:44

Payroll would be best

"Arise should be shot for insisting that their "staff" operatre through limited companies. In Julie's case, this appears to be wholly and absolutely inappropriate."

I don't know why they are doing this. Maybe they don't want issues with payroll or the risk of using self employed people but in Julie's case it is costing her a lot in time and money to receive a very small return. If she was self employed I am sure she could do her own tax return but she can't effectively deal with the issues presented by a limited company.

It would make more sense to put Julie, and many others like her, through the payroll given the small earnings.

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By Healthpay
08th Aug 2012 11:54

Sorry to disagree but.....

.......

I ran a limited company of just me (although in those days you did need a director and a secretary so my wife helped out nominally) for 10 years, completed all the paperwork correctly and on time and incurred no penalties throughout that time.

I got all my advice from some well written books, one on the duties of a company secretary and the other on basic book-keeping.

I later converted to being a sole trader to avoid statutory minimum wage problems and then to a partnership, and to this day I have never needed an accountant, although I readily agree that accountants are well trained to do what I have learned to do the hard way!

I suspect that just about all the people who have responded to Julie are accountants, and just can't envisage somebody doing the job without using an accountant. That could be classed as a vested interest - if not financial then at least intellectual!

I suggest that Julie needs to find some good books and make sensible use of BusinessLink. And persevere in the face of all this criticism!

 

 

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By Mike1934
08th Aug 2012 12:00

You seem to have got through the CT 600.  The part about the policies are really to do with posting the accounts to Companies House, and I would recommend that you do not tick the box which says 'do you want to report to Companies House' .  Later  you can lodge your accounts at Companies House as an abbreviated no audit set and there you just have to tick the boxes.   On the CT 600 you do not then have to answer the policies set of questions.

Technicaly, you should pay your self a reasonable number of hours at the minimum wage rate.  This is a very grey area but if you get into an investigation they will be troublesome over a wage deliberately below the NI threshold.

An accountant will not cost a fortune, particularly if you keep your records in a spread sheet and can email them to the accountant and accept an emailed copy of your published accounts, CT 600 and AA(Annual Accounts at Companies House).  [email protected]

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Replying to johngroganjga:
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By User deleted
08th Aug 2012 13:08

If you read the OP

Mike1934 wrote:

You seem to have got through the CT 600.  The part about the policies are really to do with posting the accounts to Companies House, and I would recommend that you do not tick the box which says 'do you want to report to Companies House' .  Later  you can lodge your accounts at Companies House as an abbreviated no audit set and there you just have to tick the boxes.   On the CT 600 you do not then have to answer the policies set of questions.

Technicaly, you should pay your self a reasonable number of hours at the minimum wage rate.  This is a very grey area but if you get into an investigation they will be troublesome over a wage deliberately below the NI threshold.

An accountant will not cost a fortune, particularly if you keep your records in a spread sheet and can email them to the accountant and accept an emailed copy of your published accounts, CT 600 and AA(Annual Accounts at Companies House).  [email protected]

@ £7000 salary from @ £7500 T/O seems reasonable and unlikely to be troublesome in an investigation!

May be I am soft, but I would feel guilty charging someone to do a set of company accounts in this situation, because I have a duty of care and regardless of size I could not any company for less than £350, with all the best will in the world, and Julie would have to pay another £70 VAT on top!

The easiest way would be to merge PAYE and NI and take away the grey area, allow people to tick if they are to be employed or self-employed as it would be tax neutral.

And before those living off unearned income start whinging, may be have a lower rate of tax for investment income to avoid any such being penalised (with anti-avoidance provisions to stop the lower rate applying to dividends from your own company).

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By Ann Lovatt
08th Aug 2012 12:01

reply to dstickl post above......

........sorry to cause any confusion my reply above refers to "dstickl" comment, requesting simple tax packs from HMRC and is out of context to current posts!!

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By Tom 7000
08th Aug 2012 12:17

The easy answer

Book an appointment with a corporation tax inspecor at your local tax office. Take your records there and he will show you what to do and which forms to fill in. He will not charge you for this.

 

I believe you can also go to the companies house offices in either london or cardiff and the staff there will show you how to file abbreviated accounts for free. This assumes you wish to keep the company and not have it dissolved

 

The best comment on here is about the broken leg...so go see the NHS!

 

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By pauljohnston
08th Aug 2012 12:19

Half Way House Advice

Can I recommend to Julie that she take all her work and books a couple of hours with a local accountant who will for his fee advise her where she has either misunderstood or been misled by HMRC/Companies House.

Everything is penalty driven and these could amount to a great deal more than an accountant's fees.

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Image is of a pin up style woman in a red dress with some of her skirt caught in the filing cabinet. She looks surprised.
By Monsoon
08th Aug 2012 12:25

Julie

I'm more than happy to chat this through with you on the phone for no fee. I'll PM you my contact details and am happy to point you in the right direction.

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By petersaxton
08th Aug 2012 12:30

Limited company is not easy for non-accountant

"I later converted to being a sole trader to avoid statutory minimum wage problems"

You wouldn't have any problems as a director of your own limited company if you didn't have a service contract which I wouldn't see the need for.

How did you prepare full statutory accounts? I wouldn't expect you to know the legislation.

"I suspect that just about all the people who have responded to Julie are accountants, and just can't envisage somebody doing the job without using an accountant. That could be classed as a vested interest - if not financial then at least intellectual!"

I've known plenty of people doing accounts themselves. If they are self employed it's not too difficult but in practically every case of a limited company they get it wrong.

 

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By DHarris
08th Aug 2012 12:31

IR35

A lot of IT and even construction industry companies refuse to engage self employed individuals because of status decisions being made retrospectively and they are reluctant to employ because of all the rights and responsibilities associated with employees never mind the need to pay Employers NIC.

Instead the company insist that the person undertaking the work does so through a limited company. The status decision then resides with the individuals limited company and all the tax enquiry problems lie with the individuals limited company. The one thing this does is put the IR35 obligation on the individual running a "Service Company".

 

As long as you don't have an engament that extends beyond 18 moths for the same company you will probably be OK and due to the level of turnover you are unlikely to be a HMRC target but IR35 is something to take into account when assessing the risks of being a Limited Company.

 

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By mab123
08th Aug 2012 13:11

paying for an accountant

OP, since Arise are the only people to benefit from you having a limited company, it would be fair for them to pay you extra for the cost of an accountant over what you have already agreed as your pay per hour and other expenses.

At least, in a fair world.....

Its possible to run a ltd company without an accountant, but you need to learn a lot virtually to the level of being an accountant yourself!

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By Whinger
08th Aug 2012 13:28

wonderful
Thank you all so much.
I have loved every post of this er post.
Peter you are a true gent and I would like to buy you a virtual pint.
It has made my week. I am truly humbled.
So if Old Grey Accountants fee was £350, that looks cheaper than the P35/P14 fine which will head over soon. Bargain.

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By teresaweezer
08th Aug 2012 13:36

I read this whole thread

I'm with you mackthefork!!!

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Replying to cstwragby:
By petersaxton
08th Aug 2012 14:01

Too late

teresaweezer wrote:

I'm with you mackthefork!!!

A day and a half too late.

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By AddsUP2Me
08th Aug 2012 14:57

I agree, Peter Saxton is a gentleman.

Straight forward, honest and helpful.

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By tltodman
08th Aug 2012 23:22

IR35

Not sure anyone has mentioned this little gem yet.

Since most of income is being paid under PAYE it is unlikely to be an issue - but if things change & you earn more income & pay the balance in dividends then it starts to rear its ugly head in this situation (director/shareholder doing all the work).

Just thought I'd throw it into the pot...

Tracy

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Replying to Matrix:
By petersaxton
08th Aug 2012 23:34

Little gems are always worth a repeat

tltodman wrote:

Not sure anyone has mentioned this little gem yet.

Since most of income is being paid under PAYE it is unlikely to be an issue - but if things change & you earn more income & pay the balance in dividends then it starts to rear its ugly head in this situation (director/shareholder doing all the work).

Just thought I'd throw it into the pot...

Tracy

Eric T and DHarris have mentioned it

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By techadviser
09th Aug 2012 09:43

Accounts format

Nobody seems to have mentioned that the accounts have to be in a prescribed format.  Julie states that she didn't really understand about accounting policies, so I would expect that to mean that she is unlikely to be familiar with the Companies Act and associated legislation relating to accounts preparation and the required disclosures.

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Replying to Portia Nina Levin:
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By David Franks
09th Aug 2012 09:52

Not relevant

techadviser wrote:

Nobody seems to have mentioned that the accounts have to be in a prescribed format.  Julie states that she didn't really understand about accounting policies, so I would expect that to mean that she is unlikely to be familiar with the Companies Act and associated legislation relating to accounts preparation and the required disclosures.

 

As Julie is filing electronically with Co's Hse she will just fill in their template and she has already said she used the HMRC filing system, which again  allows you to just fill in boxes. No accounts are required with either method.

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By petersaxton
09th Aug 2012 10:01

I think I covered statutory accounts yesterday with my comments

 

“How did you prepare full statutory accounts? I wouldn't expect you to know the legislation.”

“I've known plenty of people doing accounts themselves. If they are self employed it's not too difficult but in practically every case of a limited company they get it wrong.”

David mentions that no accounts are necessary, but while it is possible to put the numbers in the right place it’s possible to get other things wrong. I’ve seen an accounting policy simply showing the turnover figure!

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By Chris Smail
09th Aug 2012 10:19

Is Julie preparing full accounts?

It would seem likely that she believes that completing the combined filing system she is discharging her responsibilities as a director.

Perhaps that should be the case.

It is all too easy to read a posting like this and think 'Good grief, they really have no understanding of what they are doing' but why should the government pile regulation on regulation.

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By Bob Long
09th Aug 2012 10:19

I think a telling point here is also that Julie has stated that she was confused by the request for "Accounting policies".

The requirements of the Companies Act and GAAP/IFRS are not something you can simply "pick up" when compiling Company Accounts.

I would also strongly suggest that Julie obtains professional help when compiling Company Accounts. They are not simply Self-Employed accounts with the company name tacked on them!

Apologies if this is deemed a little patronising, but that "telling point" has me as worried as the tax implications involved here!

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By David Franks
09th Aug 2012 10:19

Not saying correct

Yes, I am not saying the figures input would be correct, just saying it is possible to jump through the hoops of the system without drawing up any accounts.

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Chris M
By mr. mischief
09th Aug 2012 10:51

too true!

Too true and as long as she files on time this might be Julie's best bet.  I won a client from a local "accountant" - the limited company accounts he sent turned out to be sole trader accounts with share capital added, and nowt more than that.  4 years he'd been doing that for this client, Goodness knows how long for others.

In this one client there were:

1.  Dividends in breach of the Companies Act.

2.  Overdrawn director's loan with no BIK or interest charge.

3.  Capital allowances each year made up out of thin air to exactly get the corporation tax payable to zero.

4.  Numerous other lesser muck-ups which a 30 second glance from anyone with  a clue in HMRC or Co house would have immediately have identified as "well dodgy".

No penalties, no enquiries, nothing - for 4 years in a row.

Let's hope Julie gets away with it if she chooses this route.  Her "employer" is a jerk.

 

 

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By Eric T
09th Aug 2012 12:24

The only people who seem to care that matters are handled correctly in regards to Company Law, accounting principles and tax legislation are accountants.

 

Everybody else seems content to file the minium of "what they can get away with".

 

And with HMRC and Companies House failing utterly to discharge their legal responsibilities, many people do indeed get away with filing what is, in essence, a piece of accounting junk.

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By AddsUP2Me
09th Aug 2012 12:35

Does anyone know?

Does anyone know how we contact the webmaster? I have this thread and others set to send an email when someone adds to it. The system is sending two emails/notifications for every post made. It seems to be a glitch for the last day or two.

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Replying to Portia Nina Levin:
By petersaxton
09th Aug 2012 12:45

Your end?

AddsUP2Me wrote:

Does anyone know how we contact the webmaster? I have this thread and others set to send an email when someone adds to it. The system is sending two emails/notifications for every post made. It seems to be a glitch for the last day or two.

I don't have this problem.

Have you twice requested to receive this information?

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By Briar
09th Aug 2012 16:12

What about social security benefits?

If you are being paid more than the Lower Earnings Limit (but less than the Secondary Earnings Threshold) then, if you file a P35 and P14 with HMRC you will be credited with social security benefits and state pension contributions. If, as you say, you haven't filed a P35 (because HMRC incorrectly told you it was not required!), then you miss out on the benefits. Of course, as has been pointed out, you are now liable for penalties for not filing a P35 ontime (and ignorance of the law is not an excuse).

I love this thread. It is showing how much accountants can help clients and how much those clients should appreciate what we do for them. We take for granted much of the knowledge and procedures we have built up over many years but when someone comes along who simply refuses to take professional advice it really shows how much we have to offer!

Julie seems scared of asking an accountant to advise her. Has she actually asked one for a quote? If her affairs are so simple a fee of £300 (or less!) would not seem unreasonable. The time she has spent reading to try to understand the rules (as set out by HMRC and CH) and then making phone calls could have spent earning some money with which to pay an accountant and sleep happily at night.

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By AddsUP2Me
09th Aug 2012 16:52

Good thinking, I'll cancel notifications and see if that works. Thank you Peter.

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By User deleted
11th Aug 2012 21:51

Why?

Firstly, who is arrogant and rude?

If someone posts a reply that is totally incorrect on every point Peter has the right to respond as he did, if he hadn't then Julie could have acted on totally wrong advice. It is not rude to point out an error, it is a duty on a forum such as this, and as for arrogant, how so? If you are going to post bilge on here don't get upset when you have it pointed out to you.

If you are talking about the rest it was friendly banter between two long timers on here!

to sum up -

I thought a Ltd company had to have a minimum of two directors NO IT DOESN'T and each had to file a tax return NOT NECESSESSARILY. That's on top of the Ltd accounts that need to be filled at Companies House by a Chartered Accountant ANY AUTHORISED PERSON CAN FILE THEM after being audited UNLESS THEY MEET THE CRITERIA FOR AUDIT EXEMPTION (WHICH JULIE'S COMPANY WILL!).

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By duncanphilpstate
13th Aug 2012 18:09

Isn't it a sad reflection that this is so complicated?

Having read through this thread, I agree that Arise are being pretty rotten insisting on limited companies, but...

For such a simple case, you'd think that between them HMRC, Companies House, the world of accountancy and last but not least the Government would have in place legislation that enabled a moderately intelligent person (no offence intended to OP, this is a general statement) to inform themselves and complete the necessary accounts and submissions for a micro-company.

In fact I think some other EU countries have managed this.

The only basic difference between the self-employed situation here and the OP's situation seems to be the introduction of a limited company. Yet I suspect we all agree that her self-employed submissions would be trivial and within her capabilities.

Now I know some people will go on about the resposnibilities accompanying limited liability and so on, but really, pragmatically this company is miniscule and should be treated as such. If and when it grows then expect more from it (measured by employees, assets, turnover - the usual things).

Anyone agree?

 

 

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By petersaxton
13th Aug 2012 18:19

Miniscule

You say that the figures may be miniscule but then some of the people that these small companies deal with would think that these small amounts are a lot to them. As soon as you make things easier then people take advantage. Just because Arise are being unreasonable doesn't mean that the government should change all the rules. People like the OP should refuse to deal with Arise. If they don't want to then they have to accept what's required.

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By Healthpay
13th Aug 2012 18:23

Agree entirely

There are reduced requirements for smaller companies, but the problem comes that there is no offical recognition of micro companies. I have been in a business of just me, or two people for over twenty years, and whenever something is labelled for small businesses I find it really applies to, what to me, seem like huge outfits. If the government could just recognise micros (10 people or less is the conventional limit) then I don't see why it wouldn't be possible for micro limited company accounting and reporting to be quite similar to sole trader,

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Replying to Portia Nina Levin:
By petersaxton
13th Aug 2012 18:29

Madness

woodworm wrote:

There are reduced requirements for smaller companies, but the problem comes that there is no offical recognition of micro companies. I have been in a business of just me, or two people for over twenty years, and whenever something is labelled for small businesses I find it really applies to, what to me, seem like huge outfits. If the government could just recognise micros (10 people or less is the conventional limit) then I don't see why it wouldn't be possible for micro limited company accounting and reporting to be quite similar to sole trader,

It would be absolute madness not to require a balance sheet for companies with 10 employees or less.

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By Eric T
13th Aug 2012 18:31

Maybe banning the concept of limited liability for micros might be the answer. Why should a tiny "business" based on an individual's services as opposed to bona fide trading be granted the priviledge of limited liability - especially when the only reason they form a limited liability entity is when it is virtually forced on them by those they seek to do business with.

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Replying to johnjenkins:
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By dstickl
13th Aug 2012 18:53

@Eric T: The market asks for Ltd liability, & we live in a mixed

Eric T wrote:

...    Why should a tiny "business" based on an individual's services as opposed to bona fide trading be granted the priviledge of limited liability - especially when the only reason they form a limited liability entity is when it is virtually forced on them by those they seek to do business with.

Hi Eric T!    My answer to your above question is:  For commercial reasons, a market participant is asking for a Limited liability supplier, and - whether you like it or not - we live & work in a free market mixed economy, including some public service provision.

Eric T wrote:

Maybe banning the concept of limited liability for micros might be the answer.    ...

IMHO: No, that would be like the tail wagging the dog, so-to-speak.

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