Blog posts written during November 2015

Accounting requirements for new companies

Friday Friday, November 20, 2015 by Administrator

These days it seems a web site is a necessity for customer credibility and as part of UK law it should contain your company contact details. This is usually on a "contact us" page. Company registration details should also appear here. There is also a necessity for a privacy statement relating to content and cookies.

If you want a web site, we recommend that you initially have one of the many low cost options available for hosting and email. Our software can then be accessed via link on your site. You company site does not need secure certificate or high performance hosting. Before picking a low cost hosting company, you should ensure that the site (content) and styling is easily and freely transferable to another hosting company (some are not).

Registering you company is inexpensive and easy: has all the information you need. Indeed the web sites contain increasingly valuable information which some commercial companies charge for. So beware even though it may not seem a lot: what you want can often be obtained direct from without needlessly contributing to what is effectively a scamming exercise.

Your (stated) company purpose should as simple, as broad and unrestricted as possible to avoid future operational complications. Although it is many years ago now it was our accounts advice then there is no advantage in trying to describe you company's activities in a limiting way.

Although you probably know this, a summary of the (legal) bookkeeping and reporting requirements:

All companies are required to maintain accurate records of income,
expenditure, assets and liabilities - these records should match the
bank statements and give a true and fair view of the company.

These records can be kept manually, in spreadsheets or using a
software package but must be kept for 6 years.

If turnover exceeds the VAT threshold (currently £82,000) then VAT
returns also need to be filed and VAT paid every quarter.

It is recommended that the following are recorded as a minimum:

For each transaction (eg. sale or purchase) record:

• Amount £ (and other currency)
• VAT £ (if you are VAT registered)
• Name of customer or supplier
• Date of transaction
• Other person's reference if appropriate
• Internal reference

The following are typical transactions which should be recorded:

• Sales
• Money received from Sales
• Purchases & Expenses
• Capital purchases
• Salaries
• Loans and repayments
• Dividends
• Owner's drawings

The year end accounts must include:

- a balance sheet (which lists company's assets and liabilities at the
end of the financial year)

- profit and loss account (which summarises the company’s sales,
expenses and the profit or loss in the financial year)

- notes about the accounts (including more details of Fixed Assets,
Directors' remuneration, and transactions with Directors)

- director's report

- auditor's report (unless exempt).

If turnover is less than £6.5 million then only abbreviated accounts
(balance sheet and notes) need to be filed with Companies House.

The Company Tax Return includes:
• Form CT600
• Corporation Tax Calculations (also known as Computations)
• Statutory Accounts

The directors of a limited company should also submit a
self-assessment return detailing all income received.

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