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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Year end under review: 5th April 2015 Company

Resolved Question:

Hello,
Year end under review: 5th April 2015
Company type: Limited
Trade: The sub letting of a leased private box at popular sports venue
I am preparing some company accounts for my grandfather that need to be filed this week and I need some help/advice to make sure I am doing it right.
The company's last sales invoice was issued in May 2014 and the bank account was closed in September 2014. The VAT returns were done annually (the final one being submitted in April 2015) and HMRC have been notified that the company has ceased trading for VAT purposes.
My series of questions are as follows:
1. On the fixed asset register there is a balance b/f of £357. I have got the FA register down to zero by treating it as a disposal and then showing the £357 as a loss on the FA register. Is this the correct treatment? Should I have put a pro rated depreciation charge in for April and May and then done the disposal?
2. There is a b/f balance of £1,235 re capital allowances. The market value of these items will most likely be under £100. They relate to a TV and some fixtures and fittings from the box that were left there when the hire of such box came to an end.
3. I have unpaid debtors of £746 which I have written off as bad debt. No adjustment made to the VAT return and VAT account now closed. This just increases the loss on the p&L. Is that ok?
4. £78 left in creditors. I have written this off to retained earning on the balance sheet. Is that correct treatment?
5. There was an historical VAT creditor of £144. I too have written this off to retained earnings on the balance sheet. Is this correct treatment?
6. What do I do with the issued share capital of £100?
7. The directors loan account has the following entries:
Date Payee Amount (£) Balance (£)
06.04.14 Balance b/f 0.00 0.00
Cranbrook Jewlers invoice 1,351.68 1,351.68
Accountancy Fees 2013-14 -350.00 1,001.68
Accountancy Fees 2014-15 -350.00 651.68
Cash from company bank a/c 570.78 1,222.46
Transfer to RE -1,222.46 0.00
05.04.15 Closing balance 0.00
Is the transfer to RE the correct treatment?
8. All my balances in the balance sheet are at zero except for the shareholders fund which has the £100 issued share capital, reserves of £1,673 and a loss of £1,772. What do I do with these? How do I close down the final accounts?
9. I will use tax calc to file the accounts to HMRC and have to do the separate filing to companies house. May need some assistance if possible?
Many thanks
Hannah
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your question...Let me study your questions and I will revert to you many thanks
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your patience. Here are my answers to questions raised -I am preparing some company accounts for my grandfather that need to be filedthis week and I need some help/advice to make sure I am doing it right.The company's last sales invoice was issued in May 2014 and the bank accountwas closed in September 2014. The VAT returns were done annually (the final onebeing submitted in April 2015) and HMRC have been notified that the company hasceased trading for VAT purposes.My series of questions are as follows:1. On the fixed asset register there is a balance b/f of £357. I have got theFA register down to zero by treating it as a disposal and then showing the £357as a loss on the FA register. Is this the correct treatment? Should I have puta pro-rated depreciation charge in for April and May and then done thedisposal?[a] Your treatment is correct .. there is no need to provide depreciation charge in theyear.2. There is a b/f balance of £1,235 re capitalallowances. The market value of these items will most likely be under £100.They relate to a TV and some fixtures and fittings from the box that were leftthere when the hire of such box came to an end.[a] Youshould make a claim for balancing allowance in the computations section offinal CT600 return. 3. I have unpaid debtors of £746 which I have written off as bad debt. Noadjustment made to the VAT return and VAT account now closed. This justincreases the loss on the p&L. Is that ok?[a] Your treatment is correct4. £78 left in creditors. I have written this off to retained earning on thebalance sheet. Is that correct treatment?[a] You should write back to the adminexpenses as creditors not settled (effectively reducing the expenses)5. There was an historical VAT creditor of £144. I too have written this off toretained earnings on the balance sheet. Is this correct treatment?[a] If this is a historical creditor (maybe overstatement of VAT owed in the past) then it is written back as negative expenses6. What do I do with the issued share capital of £100?[a] Issued share capital remains at£100.. if there is a surplus on the retained earnings then it is distributed to the shareholders on closure of company.7. The directors loan account has the following entries:Date Payee Amount (£) Balance (£)06.04.14 Balance b/f 0.00 0.00Cranbrook Jewlers invoice 1,351.68 1,351.68Accountancy Fees 2013-14 -350.00 1,001.68Accountancy Fees 2014-15 -350.00 651.68Cash from company bank a/c 570.78 1,222.46Transfer to RE -1,222.46 0.0005.04.15 Closing balance 0.00Is the transfer to RE the correct treatment?[a] Not clear what you have done here –written off the balances or paid off the loans. 8. All my balances in the balance sheet are at zero except for the shareholdersfund which has the £100 issued share capital, reserves of £1,673 and a loss of£1,772. What do I do with these? How do I close down the final accounts?[a] These balances will remain on closure. It appears the balance sheet will finish with negative shareholders’ funds. 9. I will use tax calc to file the accounts to HMRCand have to do the separate filing to companies house. May need some assistanceif possible?[a] I would suggest you file accounts at Companies House using their website and it is easy to file.I will be happy to help you with CT600 questions if you have.. please send a new question and ask for me if you need my input. I am providing you with a link here.http://www.contractoruk.com/limited_companies/how_shut_down_your_limited_company.htmlYou may find information on closure of company helpful I hope this is helpful and answers your question.If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4879
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
taxadvisor.uk and 2 other Tax Specialists are ready to help you
Customer: replied 1 year ago.
Re q7, I have written the loan off against RE so assume that the £1,222 will have to be declared as a dividend on the shareholder's tax return in 2015/16?Can I email you my accounts and CT600 for you to check I have done it right?Would I have to start a separate question to get advice on what steps, once the accounts have been filed with both HMRC and CH, I need to take to close the company?Are calls included in the subscription?Kind regardsHannah
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply.
If you have taken money to clear the director's account then it is not dividends.. as dividends are distribution of taxed profits.
You will have to start with a fresh question and you can put details within the question.
Phone calls are not included in the subscription as far as I know.
Many thanks
Customer: replied 1 year ago.
So how does the director account for the transaction?The way I have prepared the accounts is so that the shareholders funds are zero. Is that not right? The balance sheet is zero.
What does the director have to do to account for the £1,222 that was used from retained earning to write off the loan?Sorry if I am appearing dumb, its just I don't have any working experience with final accounts and closing a company, I am just getting the job done for my grandfather!Do I put "FAOCustomerquot; in order to get you again?
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply...
Please send a fresh question and in the body of the question please state it is for FAOCustomer
Either attach the balance sheet showing this year and last year or type figures in your question.
Hopefully, no other expert will attempt to answer it.
I will be away from my desk for the next 2 hours..
Many thanks

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