Email Out: 07 April 2010
I have made some manual alterations to the accounts and so would be grateful if you can come to my office so that I can explain the changes I have made.
I am afraid this means retyping some pages of the accounts.
Also the director did not sign above his name on neither the balance sheet or on the director’s report.
My biggest concern is as I said at interview is the car and the subsequent personal benefit assessable on the director of the company. You need to calculate the emissions of the car in order to calculate the car benefit and so I attach two links that will help you to calculate this figure i.e. http://www.vcacarfueldata.org.uk/ved/) orhttp://cccfcalculator.hmrc.gov.uk/CCF0.aspx
Please note that this would be for part of the year only and not the full year i.e. 06 November to 05 April 09 i.e. 24+31+31+28+31+5 = 150 from 365 days.
The figure for car benefit sits on top of the salary and is subject to personal tax and is reflected in the coding allowance but is calculated on a fiscal basis and not an accounting basis which means that (in your case) you calculate gross salary from 06 November 2008 to 05 April 2009 and then from 06 April 2009 to 05 April 2010 and these figures must be returned on the directors tax return forms to 05 April 09 and to 05 April 10. Have you forwarded a tax return form 09 to Revenue and Customs and if so may I please now have a copy?
You said that the director not once used the car for private usage. In this case there will be no fuel charge for private usage but there may be a car benefit charge. To assess this situation I must know in whose name is the car and if the contracts of the company were drawn in the directors name or someone else.
It is important to understand that this would be a personal tax liability and not a liability of the company.
If the emissions of the car are high then the car should be withdrawn from the company (you must draw up an ordinary resolution for this) and the resale value of the car (from glasses guide) debited to the directors loan account figure with the company. Therefore if there is a benefit it will only be for one fiscal year i.e. to 05 April 09.
Instead charge the company at the rate of 40p per mile for business mileage thereby obtaining a corporation tax deduction at 21% but with no personal tax/NI benefit on the director. (This advice is correct only if the car in question has extremely low emissions).
Please reply to me as soon as is possible.