Bookkeeping for my LTD company - The Book-keepers Forum (UK)

Jay3 · Senior Member

Bookkeeping for my LTD company

Cheshire · Master Book-keeper

Hi Jay
I've seen both or your posts which on the face of it ask different questions, but should be read and viewed together given the dormant status of your company during part of the period.

My questions has to be...was your company actually dormant? The definition of a dormant company is one having no significant transaction, that does not just mean no sales. It can in fact even mean that the few pence you receive on any balances can render it as not dormant.

By virtue of all the expenses you say you have personally paid it's seems to me that the company should not have been declared dormant. Those expenses if they wholey and exclusively relate to the business should have already been reflected in the accounts, despite you paying for them out of your own pocket.

I think you should get an Accountant to have a look at this and give you some formal advice about whether you need to re-submit revised accounts etc.

Happy to be corrected by any of the guys on this site if I'm wide of the mark, of course.

-- Edited by Cheshire on Tuesday 15th of September 2015 09:58:00 PM

MarkS · Expert

As said above if you have had expenditure since 2013 then the company wasnt dormant and you should have prepared accounts to September 2014 showing the expenditure. A dormant company is a company that either has no transactions or has the following transactions; payment of initial shares, fees to CH eg annual return fee, penalty for late filing of accounts. If you have any other transactions in the period either in or out then the company isnt dormant.

You should also have submitted a tax return to HMRC showing the loss in the first period.

You have a couple of options

1. Submitted amended 2014 accounts and amended tax return to HMRC.

2. Include pre September 2014 expenditure in your 2015 accounts and tax return.

FoxAccountancyServices · Expert

Spot on advice from Jo and Mark as always. Id be inclined to include Sep14 transactions in this year. No tax was due for Sep14 so I doubt HMRC would bother making too much of a meal of it, if spotted.

Jay3 · Senior Member

Hi Everyone,

Thank you very much for your input.

I phoned HMRC and talked them through my scenario and they told me that my company could be considered Dormant as I hadn't made any sales, lesson learnt perhaps.

So far I have invested £3500 and have only made circa £100 in income as my apps took longer than anticipated to develop. So we're not talking a lot of money and the company clearly isn't profitable.

I did get confused hence the reason for my post but this has come about due to HMRC telling me that it was sales that constituted trading. I was then faced with this dilemma of how to account for costs which were incurred during the dormant period.

I am using solar accounts so once I book-keep everything neither option 1/2 would be difficult but I should talk to companies house and HMRC again to agree the best way forward.

Perhaps I'll finish the book keeping first. =D

Thanks
Jay

FoxAccountancyServices · Expert

If you are using software, you can post the previous years items as the first day of the financial year - so that they pull into the accounts. Perhaps put the actual date in the detail section

PS - you could also post the previous years invoices as the same date of the first sales invoice - that might be more preferable

-- Edited by FoxAccountancyServices on Wednesday 16th of September 2015 01:10:51 PM

Cheshire · Master Book-keeper

Im afraid to say - never entirely trust what HMRC say over the phone - their staff are not qualified enough to answer all the queries. In fact they do say that themselves - bizarre though that might seem.

I use a 'Directors Bank' as Michelle suggests for posting such things that have been paid personally. Or you could use journals, but this often doesnt allow for any VAT reclaims when VAT registered, depending on which software you are using (I dont know Solar).