Hi. Thank you for the reply.
My colleague and I started a very small business last year, on 19th Feb 2013. As a start, we put £500 each to open a business account and to cover initial expenses such as developing website, ordering business cards, etc. Also as per Companies House requirement we had to have shares and we agreed to have one share each, with nominal value £1 per share.
Even though we registered in Feb 2013, our actual activity started only at the end of 2013. Also due to the specific of the business the turnover is extremely low and wouldn't even cover our expenses for the reporting period.
We have to report our accounts to HMRC and Companies House and I'm using HMRC site for online reporting using CT600. I've done part of the form but have got an error message and need to understand what I'm doing wrong. I need few clarifications in regard of:
- AC14 Cost of sales. As per the CT600 guidance, cost of sales is calculated as opening stock value plus cost of purchases minus cost of closing stock. What would be the opening stock value in our case? Should I count the cash that we put on to the bank account as the opening stock? Or the opening stock in our case is 0?
- AC34 Tax on profit or loss on ordinary activities. As we have losses, should I calculated tax on losses? What rate I should use? At the moment I put £0 in this field but I'm not sure if it's correct.
- AC38 Dividends for the period. What should I put here? Our 2 shares are really just on paper. Should I still say that we are going to pay £2 of dividends?
Hope to hear from you soon.