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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4883
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Looking at the micro entry internet based video service alongside a companies house

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Looking at the micro entry for a internet based video service alongside a companies house submission.
a relative has loaned the business AUS10,000. Do I include that as "other income" AC405 (companies house entry)? and if they are not asking for the money back (but no doubt will) how do we account for that? How is that included in the tax assessment CT600 form - is this a "bad debt" CP26? If we don't have an employee but have agreed to share revenue from the video assets with someone who produced them- how is this assessed, just like any other cost?
additionally most of the work was from home, and therefore would like to include simplified expenses for that period. Otherwise it was out of a shared office - I can put in the cost of the shared office easily enough, but I ma not sure how I put in the simplified expenses.
Can I claim any depreciation for videos? Are these classed as intangible assets?
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your questions...Please clarify for me as to which return you wish to file.. is it micro-entity accounts at Companies House or CT600 return with HMRC?What is the nature of business?What is your accounting year end?You have question about- accounting treatment of loan from a relative in the sum of AUS10,000- video assets - are they for resale or hire?- expenses related to the business including use of home. How much time is spent in the home office?What is the cost of the videos and what is their useful life? many thanks
Customer: replied 1 year ago.
Thanks for your response -
I would like to file both.
Accounting year end was 20th Jan 2015, but I will also need to make one up for 21 Jan to 31 Jan 2015
The nature of the business is a video production that gets revenue from advertising (when posted on youtube), or by selling rights to distribute (on TV platforms or apps). Videos are not for resale or hire
about half the year was out of shared office; the remainder was from home
Cost of videos - the production costs vary and are put together by various freelancers that are paid either flat fee, or a revenue share from the advertising
Customer: replied 1 year ago.
useful life - well they are a digital product so they have a eternal useful life I suppose. I guess that means no depreciation
Customer: replied 1 year ago.
Sorry I though micro entry was both companies house and HRMC?
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply and for additional information.You say the company was incorporated on 21 Jan 2014.. please advise if you started to trade on that date or was it post 31 Jan 2014?I suggest you prepare your draft accounts and I will review them for you.If the videos as not for resale but earn you money by selling rights to distribute on TV platforms or Apps then the cost of production of the video would be capitalised.You can charge reasonable expenses for use of home as office and charge all the cost of shared office.Revenue sharing will be an expense.If you are struggling with the production of accounts, I will be happy to help you by offering additional service. please let me know if this is something you would consider and I will send you an offer. I have helped many customers here with filing accounts at Companies House and with filing CT600 returns.many thanks
Customer: replied 1 year ago.
Thanks.
The company was trading from 21 Jan 2014.
"cost of production of the video would be capitalised " - what does that mean in terms of where I actually enter this in the CT600 form?I am not sure that you covered this point: a relative has loaned the business AUS10,000. Do I include that as "other income" AC405 (companies house entry)? and if they are not asking for the money back (but no doubt will) how do we account for that? How is that included in the tax assessment CT600 form - is this a "bad debt" CP26?
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply.The cost to be capitalised would fall in the category of tangible assets as equipment.The loan is a blance sheet entry would be a reported as a creditor within the balance sheet.. if loan is medium term then it is part of creditors falling due after more than one year. Loan is not income and does not get posted to profit and loss account.It is not bad debt as you are not writing off any sums due to the business.. this is amount loaned to the business.As you started to trade on 21 Jan 2014, you would need to file two sets of CT600 returns ..one for period 21 Jan 2014 to 20 Jan 2015 and the second for period 21 Jan 2015 to 31 Jan 2015.As far as filing accounts at Companies House, it is abbreviated balance sheet as at 31 Jan 2015 (covers accounting period 21 Jan 2014 to 31 Jan 2015).I hope this is helpful and answers your question.
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4883
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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