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Preparing Business Records
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Services Preparing Business Records

Limited Companies & Limited Partnerships

If you need to form a new Limited company or it is the time to transfer from self employment to a company, we will assist you at each stage in the formation and subsequent registration process with HMRC etc. We will also prepare the company’s statutory records and share certificates, if required. If you chose to bank with certain high street banks, we can obtain a credit that covers most of the incorporation costs.

If required, we will also register the company for a PAYE scheme for salary processing and assist in monthly payroll processing thereafter as described under the payroll processing

 

If you have already formed your company, we will review the statutory records position and advise accordingly on what needs to be done as the assist further with the post incorporation process and different registration processes as required. Please refer to our help sheet, ‘Incorporation Checklist’ which will help in completing the other actions necessary.

 

Book Keeping Requirements

Whilst there is a statutory requirement for a company to maintain proper accounting records, there are no statutory regulations stating what precisely is meant by proper accounting records! However, HMRC have introduced a system of ‘Business Record Checks’

where proprietors will be contacted directly to see what records they are keeping and, if HMRC are not satisfied, they will instigate further detailed enquiries. If you receive such a telephone call from HMRC, you should direct the caller to us and we will explain exactly how your business has been advised on keeping accounting and other records to comply with the Taxes Acts and Company law.

We will assist you in setting up your accounting records on our inexpensive Roseplan system or a computer package, as appropriate. We will recommend a system appropriate to your business that will ensure the records are adequate for business control and HMRC requirements. We will advise you on how to keep your supporting documentation, sales and purchase invoices and expense vouchers so that HMRC requirements are met. If you have already developed or purchased your own Excel based system or computerised accounts package, we will check and process your records to produce the annual statutory accounts and tax returns for online filing.

 

Banking requirements

When opening a company bank account, your bank will require a copy of the Certificate of Incorporation and also a copy of the Memorandum of Association of the company. We will provide you with certified copies of the documents. If you are not already known to the bank, they will also request photo ID and a recent utility bill or personal bank statement showing your personal address.

When open, the company bank account should receive all receipts for company invoices together with any other non-sales income. The only money that should be paid out from the company’s bank account should fall into the following categories:

  1. Salaries paid to staff or directors, including PAYE tax and NIC, if appropriate.
  2. Any expenses and capital equipment costs paid by the company itself in its business operations.
  3. Reimbursed expense claims to staff or directors for company expenses that have previously been settled personally.

Net dividends and loans paid to shareholders. Please refer to our detailed help sheet, ‘Directors Income etc’ which details the advice on how to approach these payments.

 

Income extraction.

The most flexible way of extracting monies from the business is by way of a mixture of salary and dividend distribution and various expense claims for permissible expenses. Dividends should be set at a level each month/quarter/year to cover the director/owner’s personal cash requirements (over and above what is not covered by his/her salary). We can assist the directors in preparation of board minutes and tax vouchers to properly evidence the dividends taken. It is also important to remember that dividends are a distribution of net company profits (after corporation tax at 20%) to the shareholders and therefore the company must have net profits at least equal to the net dividends being drawn. We can assist you in the ongoing calculation of permissible dividends by supplying a dividend calculator.

HMRC are very strict on funds taken from a company by its owners/directors. If the funds taken are not covered by the four categories , a –d, given above, there could be costly and complicated tax implications so please avoid this situation at all costs. With our ‘on-hands’ approach to assisting your business, we will ensure that you will avoid difficult situations with HMRC and address any problems before the accounting year end.

 

IR35 reviews

With the advent of HMRC’s new approach in 2015/2016 to contractors in general and specifically to those contracting to public bodies in 2015/2016, we can assist in contract and IR35 Reviews to establish exactly how to proceed with the most appropriate business format.

 

Self Employed & Partnerships

Excluding the comments relating to company formation and dividend extraction, much of the above advice also applied to self employed businesses and partnerships. We also have specifically tailored our Roseplan Accounts system for the self employed so that you are able to record all your out goings and maximise the tax deductible expenses in a cost efficient way.

If your self employed business is reaching the profit level where a Limited Company format would be more tax efficient, we will advise you on how and when to convert and assist you through the company formation process.