The following is a typical letter from a client so please read on as it may well be you.
“Look my limited company is trading in glass and I just want to get on with this job and I want nothing to do with the paperwork involved. However what I don’t like are these high charges please explain.”
Limited Company Accounts
Full accounts include a directors report statutory trading accounts balance sheet balance sheet notes fixed asset schedules detailed trading profit and loss account fixed assets and flexible dividend schedules-all with comparatives with the previous year.
A CT 600 (complicated and difficult to do) must be completed and filed at Revenue and Customs with full accounts and accounts likewise filed at Companies House.
This is a separate form and must be completed and filed at Companies House each year and is the internal workings of the company and reports directors company secretary shareholdings distribution of shares voting or non voting rights and these must be checked each year for the appropriateness of the company.
All trading limited companies have salaried directors and so a paye scheme must be opened and monthly payslips produced for each director and employee. Revenue and Customs must be advised monthly on the amount due of tax and national insurance. At the year of 05 April P60 (for the employees) P14 P35 forms (for Revenue and Customs) must be completed and filed. Strict time limits must be observed and a company only has from 05 April to 19 May to comply a total of 43 days.
Must be examined far more closely as it must satisfy wholly exclusively and necessarily clause. Also must decide on a specific policy for company cars so as to avoid large tax bills for company car benefits and so care must be taken to examine car emissions whether to charge a company for use of or to have a specific company car policy.
Dividends and Directors Loan
Each limited company must have specific policies on these and separate schedules must be kept and must match the underlying paperwork of the company.
Each director must have his personal tax return completed and submitted at Revenue and Customs by 31 January of the following year. This form collects all private savings of each director (excluding ISAS and TESSAS) individual claims against tax and salary contents of each directorship.
Books and Records
Each limited company must have a full bank sales and purchase ledger reconciliation whereby each is matched entry by entry with the underlying books and records.
Company House Fines
They are harsher than ever before with time limits and penalties raised enormously due to the Companies Act 2006. These can be checked on their website but for example are £150(was £100) and if accounts are over the 9 (was 10) month filing date. These fines then double at the end of each 3 month period and please note (very important) does not allow for amendments if incorrectly filed but merely are rejected and the goalposts moved forwards.
I therefore ask you how it can be cheap for an accountant to take total responsibility for the management of a client’s limited company. It is a professional job and can only be completed by a professional.
I just do not understand why traders are allowed to form limited companies without taking expert advice on the above matters and furthermore just do not understand as to how on some bidding sites accountants can offer to complete all the above for £500! It is impossible and so “buyer beware”.