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TaxVince
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Category: UK Tax
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Experience:  Chartered Accountant >20 years + Qualified IFA
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Hi, I recently registered a UK Limited Company, which unfortunately

This answer was rated:

Hi,

I recently registered a UK Limited Company, which unfortunately has not traded since it's registration, however as I have paid in some initial capital meant to cover buying company insurance and other fees (none of which have yet been bought/paid), I believe that this means the company does not fall under the dormant category. As such I am looking for some advice on the abbreviated returns process.

Currently I have the following:

10 ordinary shares at £10 each all assigned to me which have been paid for
£920 additional capital input from me (I do not need this to be re-paid to me) to cover costs of insurance etc

I have Bank balance of £1020 (from the above) but no other assets or liabilities, however looking at the Companies house form, I am unsure as to where the £920 additional investment should go (maybe Other reserves or P/L account?)

Any advice would be great!

Cheers!

MamaTax :

Hi Its MamaTax Here!

MamaTax :

Thanks for the question.

MamaTax :

The first thing is to get the balance sheet to balance before inputting the details on CH system or package you are using.

Customer:

ok

MamaTax :

The numbers appear not complete or balanced. For example if you issued £920 shares, your accounting records should show £920 cash and £920 share capital.

Customer:

yes I don't want it to be shares as I have already paid for them

MamaTax :

The fact that you have £1,020 cash means there is something else you have not reported.

Customer:

well I have a balance of 1020 which has come from the £100 shares total

Customer:

the other 920 has come from the extra I put in, I didnt issue any further shares

Customer:

so I guess it is a loan I do not expect to get paid back?

MamaTax :

Im not clear on share capital you have raised? first you say its £920 and the last message says £100. The botXXXXX XXXXXne is when one issues shares (if paid) the journal is Dr Cash Cr Share Capital. IF not paid Dr Debtor Cr Share capital. Its still share capital....

Customer:

I only have 10 shares at £10 each, so that means my share capital can only be 100 right?

Customer:

the other £920 I put in, without issuing any further shares so I didn't think I could put that under "Called up share capital"?

MamaTax :

Ok i see. Yes £100 is share capital.

MamaTax :

The other £920, you an option to consider that as share premium if you dont want to treat this as a loan. Another option is to treat this as a loan from you to the company if you want this paid back.

Customer:

either is acceptable to me

MamaTax :

In that case your accounts will look like this:

Customer:

but I originally did not expect to get it paid back

MamaTax :

Cash £1,020
Share capital £100
Share premium £920

If you dont take this as a loan ie you dont expect this back.

OR

MamaTax :

Cash £1,020
Loan £920
Share capital £100

Customer:

I don't see Loan on the CH form?

MamaTax :

If you intend the company to pay you back the £920 whether now or any time in the future. A loan agreement may need to be drawn.

MamaTax :

Liability Or creditors will do.

Customer:

ok, I shall leave it as share premium then

Customer:

as that was what I originally expected

MamaTax :

Ok thanks.

MamaTax :

Let me know if you have any further issues. Apologies for the misunderstanding in the few messages.

MamaTax :

If you are sorted, could you please rate the question before you go.

MamaTax :

Thanks

Customer:

So if I put it in as a share premium, do I need to do a Transaction With Director note?

MamaTax :

No you dont.

Customer:

OK, thanks

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