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taxadvisor.uk, Chartered Certified Accountant
Category: UK Tax
Satisfied Customers: 4939
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Im using Companies House / HMRC joint filing for the first

This answer was rated:

I'm using Companies House / HMRC joint filing for the first year of my small company accounts. It appears I forgot to transfer the share capital in to the company that I owe, specifically it's £1 (1 ordinary share), but I need to account for this on the return and balance the balance sheet.

I've entered £1 in AC70 - Called up share capital.

This means my balance sheet assets and shareholder funds now differ by £1.

I believe a reasonable way to account for this is to list the amount as a loan to participant (directors loan) although I don't know where to account for directors loans on the top half of the balance sheet. I think entering it in AC52 "Debtors" is correct and then giving further details in the Statutory Account Notes.

Is this correct?

Hello, if you have any questions or need further clarification after reading my answer please let me know.

 

Please advise if the company owes any money to the director at the year end for out of pocket expenses etc..

 

Many thanks

Customer: replied 3 years ago.

No. The company had no other creditors or debtors at the end of the accounting period. There was some turnover, but the business activity in this first activity was fairly negligible.

Thank you for your prompt reply.

This is what I would do as a practical solution in these circumstances...

Treat the investment in one share as a payment for that share in cash and show £1 in box AC54 - cash at bank and in hand.

This is the most practical and I have done this for many of my clients in the past.

There is no need to make any notes.. basically the share was paid for in cash and reflected in the balance sheet accordingly.

If you need more information please let me know before you rate my service.

I hope this is helpful and answers your question. I am available for any follow up questions you may have, and you can use the reply button to post your follow up questions to the page. If you are happy and there are no more issues I will appreciate if you would kindly rate the service I provided to ensure I get paid for it.

taxadvisor.uk and other UK Tax Specialists are ready to help you
Customer: replied 3 years ago.

Thanks that seems helpful.


 


One point of clarification though, since the £1 is not actually in the company's bank account, is this ok? I can transfer it now obviously, but it wasn't in there at the end of the accounting period.

Thank you for your reply.

 

For that very reason, I had suggested it was a payment in cash and cash held at year end. You may transfer it to bank account or leave it as cash in hand for accounting purposes.

 

I hope this is helpful and answers your question. I am available for any follow up questions you may have, and you can use the reply button to post your follow up questions to the page. If you are happy and there are no more issues I will appreciate if you would kindly rate the service I provided to ensure I get paid for it.

 

taxadvisor.uk and other UK Tax Specialists are ready to help you
Customer: replied 3 years ago.

That absolutely makes sense actually. Your help is much appreciated.

Thank you for accepting my answer..

Good luck.

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