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Template for Micro-entity - first set of accounts


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Hello

 

Wondered if anyone would be willing to share an excel template/example set of accounts or guidance re completing first set of company accounts for micro-entity under FRS 105.

 

There’s a generic template on google which is easy to find, and I attach link here:

http://www.xl2xbrl.co.uk/resources/template/v1/MicroEntityTemplate.xls

Having made a good start, would just like guidance in relation to how to complete for a private limited company for property btl - basic guide as to what figures should go where.

 

For example I have queries like

- where should I allocate money I put into purchasing the property. Is it a director’s loan to the company. Should it be classified as a ‘Creditor: falling due over more than one year’?

 

Am not so familiar with what figures should go where for my first set of company accounts and am more familiar with personal tax accounts.

 

Thanks in advance

Emma

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Hi Emma,

 

I am a chartered accountant who specialises in the property sector.

 

There is a big difference between doing your own personal tax return which includes property income and producing a set of accounts for a limited company as you need to understand double entry bookkeeping, accounts disclosure checklists and company taxation.

 

I would suggest you speak to a property accountant as you seem to be struggling by your own admission.

 

In terms of the money you have put into the business, this would be classed as a directors loan account. Whether it should be less than one year or not depends on the paperwork if any. Are you charging the company interest on this loan? If so, you need to complete a CT61 along with year end accounts and CT600.

 

Do you know which standard you should do you accounts under? FRS 105 (Micro) or FRS102 1A. Some lenders will want it FRS 1A or even Full FRS102 which means greater disclosure and accounting knowledge.

 

Feel free to contact me at ednan@ek-accounting.com, 07533 049236 or visit www.ek-accounting.com

 

Thanks

 

Ednan

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Hi Ednan

 

Thank you so very much for responding to my queries. I agree with your advice and have since visited a property accountant who have quite speedily produced a first draft set of full accounts and will submit the necessary sections. They charged me an hourly rate and it took them 3 hours to assimilate all the info and finish it off.

 

I have learnt a lot in a short space of time but realised it would be best to seek professional advice in the end.

 

Money put into the company was put under directors loan account to be paid off in more than one year, when funds allow, but no interest was charged.

 

Please coukd I ask what rate of interest rate might be reasonable to charge? The company hasn’t charged any interest but expect this may be a way of eventually taking money out of the company and may be a good route? (A loss shows for the first year.) Interested to hear your thoughts. Am aware that the tax free dividend limit has been reduced from 5K to 2K per year although I wouldn’t be able to take any money out this year due to not making any profit. 

 

Thank you once again,

 

Emma

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Sorry Ednan, just corrected my last paragraph as parts of it didn’t make sense when I read it back...

 

Please could I ask what rate of interest rate might be reasonable for me to charge the company? As yet, I haven’t charged the company any interest but expect this may be a way of eventually taking money out of the company and may be a good route? (A loss shows for the first year.) Interested to hear your thoughts. Am aware that the tax free dividend limit has been reduced from 5K to 2K per year although I wouldn’t be able to take any money out this year due to not making any profit.

 

Also, please could I ask if I would need to pay tax on any money I would receive in future, in respect of charging the company interest on the director’s loan.

 

Thank you

 

Emma

 

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Hi Emma,

 

I would go with around 3% above the Bank of England Base rate.

 

You are correct that the dividend exemption amount had reduced to £2k from £5k. You are also right that a dividend can only be paid if you have positive reserves.

 

In terms of being taxed personally on the interest income, you get an allowance of £1,000 if your a basic rate tax payer, £500 if you are a higher rate tax payer and no allowance for additional higher rate payers. Anything above the allowance will be added to rest of your income and taxed either at 20%/40%/45%.

 

The company will need to complete a CT61 if you charge interest on your directors loan account.

 

Thanks

 

Ednan

 

 

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