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Paid Expenses on the Balance Sheet

Micro Entity Corporation Tax first timer unsure about factoring paid expenses into the Balance Sheet

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Hi All,

I will be filing the first micro-entity corporation tax return for my limited company that has not yet received any revenue.

I currently have approximately £1,500 of fixed assets, £800 of paid expenses, and a subsequent DLA under Long Term Creditors at £2,300. Where do I account for the £800 of paid expenses on the balance sheet? Without them, it's unbalanced... total assets (£1,500) is less than liabilities (£2,300) plus capital and reserves (£0).

The books and tutorials seem to be very unclear on this. I'm not an accountant and apologies if this is a fairly basic question. Do I file them as assets??

Many thanks in advance.

Replies (18)

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By lesley.barnes
07th Jun 2020 13:47

Expenses go on the profit and loss account. The loss is then carried to the balance sheet as loses for the year. I've just noticed the other entries you are proposing on the balance sheet. They are completely wrong please book a meeting with an accountant. You don't have any share capital, depreciation etc.

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Replying to lesley.barnes:
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By smithro
07th Jun 2020 14:13

Hi Lesley, thank you for your reply. I have accounted for expenses on the P&L and produced my own balance sheet in excel, which includes the balance carried over, but my issue is there doesn't seem to be a facility to enter it on the micro-entity template provided by HMRC.

I have grossly simplified the problem to prevent the conversation potentially being derailed. It's a 1 x share limited company I have calculations for depreciation of assets and amortisation of a trademark.

If you are adamant that I find an accountant, then okay, but I figured these fairly simple accounts could be done without incurring unnecessary fees.

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Replying to smithro:
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By Cheshire
07th Jun 2020 14:52

It's there.

What about 'unpaid' expenses?

Don't forget to add back for the tax comp

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Replying to Cheshire:
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By smithro
07th Jun 2020 15:14

Hi Cheshire,

On the HMRC Balance Sheet template I only have input boxes for; 'Called up Share Capital Not Paid', 'Total Fixed Assets', 'Total Current Assets', 'Prepayments and Accured Income', 'Creditors within one year', 'Creditors falling due after more than one year', 'provision for liabilities' and 'Accurals and deferred income'. None of the descriptions to these fields or my book guides indicate any of these are appropriate for indicating the net loss from the P&L and nothing seems to automatically carry over from the P&L section.

There are no unpaid expenses. I have paid all invoices.

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Replying to smithro:
Scalloway Castle
By scalloway
07th Jun 2020 15:38

The share capital and P & L balance go into the Capital and Reserves heading.

Thanks (3)
Replying to smithro:
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By alialdabawi
08th Jun 2020 09:42

Quote:

There are no unpaid expenses. I have paid all invoices.

There will be an accountancy fee expense which remains unpaid at the year end - which will need to be included in the accounts (not balance sheet!)

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Replying to alialdabawi:
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By Cheshire
08th Jun 2020 10:00

Not 100% correct that though is it.

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Replying to smithro:
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By Accountant A
15th Jun 2020 18:21

kc jg jgb vcj

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Replying to Accountant A:
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By smithro
07th Jun 2020 16:33

Unnecessary in context of a simple question. I am a mechanical engineer, but I'm not going to charge someone a day's consultation if they just want to know what a thread is. Personally, I think it would be disrespectful if I did.

I can tell this forum is not the correct place for "outsiders". I have requested a consultation with a CA.

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Replying to smithro:
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By Accountant A
15th Jun 2020 18:21

'ph

Thanks (1)
Replying to smithro:
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By Cheshire
07th Jun 2020 18:10

You are not asking a question that is anywhere near equivalent to 'what is a thread?'

There is absolutely no need for your 'condescending lecture' comment below.

You have no clue what you might be/are missing and the advice from the very top has been to get an Accountant. Glad to see that you are taking the advice now.

Thanks (1)
Replying to smithro:
RLI
By lionofludesch
07th Jun 2020 15:41

Quote:

If you are adamant that I find an accountant, then okay, but I figured these fairly simple accounts could be done without incurring unnecessary fees.

I take it you've read FRS 105.

Who owns your company ? There don't seem to be any shareholders.

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Replying to lionofludesch:
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By smithro
07th Jun 2020 16:42

Hi Lionofludesch,

Thank you for your reply. I own the company with one share. I haven't read the FRS, rather referred to books and guides written for small business owners.

Following Accountant A's condescending lecture above, I have decided to seek consultation. I appreciate your feedback.

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By Cheshire
07th Jun 2020 13:51

Get an Accountant. If you dont, they will only haveto back track and sort out prior year messes when you do.

Thanks (1)
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By Accountant A
15th Jun 2020 18:21

;ojb;oj

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By Accountant A
15th Jun 2020 18:21

'ph'oh'

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By Tim Vane
07th Jun 2020 16:33

Just chuck in any old [***]e.

Oh, I see you already have.

Thanks (2)
Tornado
By Tornado
08th Jun 2020 13:38

The Companies Act 2006 has 1,300 sections, 700 pages and the Contents List alone is 59 pages long.

Help with any form of Limited Company is best obtained from those that know which will inevitably cost.

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