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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4983
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I have three questions please: Question 1. Unfortunately I

Resolved Question:

I have three questions please:
Question 1. Unfortunately I failed to file taxes with the HMRC for my limited company so I am about to do so now (and I realize I will incur fines). I’ve been finding one question in particular quite complicated, as I try to show my P&L for each of the several years when I had my limited company. My question is whether it’s possible to have a creditors line in the P&L, so that the money I still have in the bank account at the end of each business year doesn’t look like profit. it wasn’t in fact profit, but was just money that I was keeping in the bank to pay instructors in the year to come, for remaining instruction sessions that customers had already paid for in that current year but which were going to be completed in the following year. I notice that for the Balance Sheet (in contrast with the P&L), there is a line where I could enter this amount where it says “Creditors: amount falling due within one year”. I wonder whether it’s possible to have the same line in the P&L as well. Below I have a sample theoretical P&L and wonder if you could really kindly suggest whether it’s possible to insert creditors somewhere in there.
Sample very simplified P&L:
P&L for Year X for Instruction Agency (Limited Company):
Cash Inflow
From Instruction Clients £30,000
=Total Inflow £30,000
Cost of Sales
Salary to Director £15,000
Freelance instructors £13,000
= Total Costs £28,000
Gross “Profit"? £2,000 (Can this somehow be put into some sort of “Creditors” line instead?
Question 2. Does it have to be a UK chartered accountant who does the P&L and corporation taxes, or may I get someone from overseas to do it?
Question 3. What’s the cheapest I could pay in total (not per year) for a UK chartered accountant to do my P&L and corporation tax for six years?
Thank you!
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.

Thank you for your question...

[Q1] If you have collected money from clients that has been paid to you in advance, then it is not a profit and loss account item but should be shown as payments in advance for future services within creditors.

You should only reflect in your profit and loss account the income relating to the accounting period and not cash receipts .. prepare accounts on accruals basis i.e. match income and expenses pertaining to the same accounting period. There is no creditors line within profit and loss account.

[Q2] You don't need a UK Chartered Accountant to prepare your accounts if you are happy with the competence of an overseas based accountant.

[Q3] This is a difficult one to answer.. it depends on how complicated your affairs are and whether you have adequate accounting records. You could be looking at at least £4,000.

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.

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Expert:  taxadvisor.uk replied 1 year ago.

I thank you for accepting my answer.

Best wishes