ASK & DISCUSS INDEX

8 years, 9 months ago - Paddy Robinson-Griffin

You get what you pay for, and if he charged you £0 you're unlikely to be able to sue

8 years, 9 months ago - Paddy Robinson-Griffin

Oops, premature submission.

I mean you can sue, but I doubt his professional indemnity will cover it, and frankly it's churlish anyway!

So, DIY. Limited Company accounts are a FAR bigger job than sole trader. Sole trader accounts are highly simplified, company accounts are enough of a job that they take qualified, experienced accountants a day or more to do, and you could DIY but it takes longer. High street accountants may charge you £1000+ VAT, you may find other accountants who'll sort them out for £600+ VAT. It's not like just doing a VAT return online!

You ALSO have Companies House annual returns to do, these are separate from the HMRC tax return (CT600), but are very simple and can be done online for £13. I would not suggest trying to do your own CT600 if your level of understanding is low.

Can you be "person trading as xyz", absolutely, but it may affect which clients will engage you. I like to engage limited companies as there's an absolutely clear and distinct line between whether or not you're an employee. If you're a sole trader, it gets messier and you may be a "disguised employee", causing me retrospective tax problems and making you more expensive. If you were working on a feature film, by law I couldn't accept your self employed status in most roles without you having extra (surprisingly unheard of) paperwork and then I have to check it on a case by case basis, etc., or put you on payroll and deduct your taxes and NI and have to manage holiday pay and payroll run fees. In short, I can contact a limited company and there's no complication, or sole trader with more fuss. That said, it may be better for you than spending proper money on a proper accountant for a barely trading company.

8 years, 9 months ago - Reality Check

It's driving me a bit mad. When I called the HMRC helpline I felt so stupid b/c they made it sound simple, but when I speak with the accountant I feel stupid b/c he makes it sound so complex. I couldn't possibly do it myself. But the HMRC website makes it look really simple: profit and loss, balance sheet, directors note - and I think it's even less than that if the business is dormant.
If I could shut it down, shove it where the sun don't shine, I would! But I want to make documentaries and funding opportunities are more likely to be available to registered companies, than Jo Schmo trading as abc123. The company has been open two years and made no money, so the accountant recommends closing it down, but it's like chicken and egg, or rock and a hard place - I'm even less likely to get funding without the ltd company.

It's seriously depressing me.

I find it odd as well that the original fine was £100, but you mentioned accountants of £1000 plus VAT. I could do it myself (poorly) and pay the £100 and still be saving money. I think that's whats most maddening me. The accountant seems like he's doing me a favour, filing my taxes for free, but it's not really free when the fine notices arrive ;)

8 years, 9 months ago - Paddy Robinson-Griffin

You could do it yourself, get it wrong, be fined for £100 plus a multiple of incorrect taxes, plus pay for someone do it right plus possibly have to defend a court case. Being a director of a company carries responsibilities. £100 is a slap on the wrist reminder, not the end of it.

Maybe shut it down, and if you get to a stage where you need it, start a new company?

8 years, 9 months ago - Reality Check

- "Maybe shut it down, and if you get to a stage where you need it, start a new company?" -

That's what I mean by chicken and egg. The company doesn't make money so I don't need it / but I need a business to make money.

I'm going to do more research. Maybe llc or plc businesses are a bit simpler than ltd, I don't know.

Thanks for the advice.

8 years, 9 months ago - Paddy Robinson-Griffin

LLC is not a UK structure, PLC is like ltd but many times moreso, suitable for listed companies. Neither will be suitable.

8 years, 9 months ago - Reality Check

I know. After I wrote that comment i did a wee Google search. Getting pretty frustrated now.
Seems like the only way to do business is like Donald Trump, it helps if you already have money. It seems counterproductive trying to grow a micro business an having to pay accountants £1000+ to do accounts for zero income. Seems backwards. You should be able to do it simply yourself when there is literally no money to tax. Where's Jimmy Carr's accountant when ya need him? You think he has phone access in his cell? ;)

8 years, 9 months ago - Paddy Robinson-Griffin

Maybe if you've literally not a penny through the company you can get someone to do it for less, maybe £100-200. Being a company director has responsibilities and assumed knowledge of these responsibilities. There are a lot of concessions for consumers in the world, consumer rights, etc., which don't apply to businesses who are assumed to be making informed decisions and held accountable for them. Most companies are paying accountants to do do the returns as they are viable companies. If your company isn't viable, close it down properly and set one up when you need it. You can establish a company within 48h (maybe even less) when it's needed, and a company bank account too.

You could look at crunch.co.uk as an online accountant who'll keep you legal - not film specialists but you're not making films through the company at the moment either.

My opinion - your free accountant is bad value for money. Close the company and IF you get an offer requiring a limited structure then form a company and employ an accountant to do the job right for you.

8 years, 9 months ago - Tony Oldham

A company is NOT dormant if you have transactions/ expenses only running through it.

A company is more complex with the accounts/ paperwork and fines etc. Anything you pay yourself should also be subject to PAYE which has its own tough penalty regime. Miss it any month and a penalty is incurred.

In my opinion it's best not to run a company until there's justification for Limited liability, or it's a necessity for getting funding, TV contracts etc.

Sole trader accounts can often be done by an individual themselves. A simple income & expenditure statement is sufficient for the tax return.

Also, anyone with or without an accountant really needs to get their paperwork to the accountant a good few months before the filing due dates. Usually, if you have a contract of service with the accountant, and you supply the info in good time, they will take care of the fines and penalties etc.

My guess is that you do not have a signed agreement with this accountant which would state the position with regards late filing and the client's responsibilities for providing paperwork on time.

You could close the company without paying the fines and just restart. Your next filing due date for accounts (if active) is then about a minimum of 21 months from your start up date (I believe depending on your year end). Do NOT start a company unless you can afford annual fees of £1000 plus per annum. That's a realistic low budget fee for accounts, HMRC, Companies House, PAYE and CT issues.

Best of Luck, Tony

8 years, 9 months ago - Reality Check

Strangely the Gov.uk website says you don't have to file Corporation Tax if the company is registered dormant. You just file annual accounts and a confirmation statement. It was registered dormant with Companies House but not HMRC. It hasn't started trading yet, so I don't know what the accountant is going on about the needless difficulty of filing these accounts. They shouldn't have had to be filed in the first place if he'd just registered it dormant.
So now I'm even more confused. If the biggest difficulty is Corporation Tax, and this business is dormant to the point of comatose, then there should be no problem - dormant limited companies don't file CT until they're restarted, right?

8 years, 9 months ago - Tony Oldham

I think the Dormant statement is the equivalent of dormant accounts, so they still need to be filed on time to avoid penalties. i.e 9 months after the Companies Year End. Usually, but I'm no expert. And the penalties double the following year if you're late again.

For CT and tax issues, you should be able to write to your Companies HMRC office and appeal penalties on the grounds that you're dormant. Providing dormant accounts have been filed.

There are penalties for Companies House, and separate penalties for HMRC. Companies House are often the most severe penalties, unless tax is due and not paid on time.

If your company is showing as active with Companies House Webcheck, until Dormant accounts are filed with Companies House, HMRC will view a Company CT Return as due. Usually HMRC would write to you advising no companies tax return is due (if none due).

When I mention re-start above, I mean close the present company via Companies House. You could then start up a new company with similar name.

8 years, 9 months ago - Tony Oldham

Just a quick add on.

To clarify Dormant accounts would always be due to Companies House and penalties from £150 for 1 day late, to £1500 for over 6 months late.

HMRC return is a separate filing and penalty regime. No CT Return is likely to be due so should be appealed via your companies HMRC office.

HMRC might argue that you're 'active' if you are openly advertising for clients etc, but they would usually explain their requests.

Best of Luck

Cheers Tony