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Post Info TOPIC: I've made a simple thing too complicated!


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I've made a simple thing too complicated!
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Help!
I've really buggered it up.

I opened a gardening partnership business back in october 2007, but it fell through in june/july 2008. Being employed part time by a well known supermarket, i only recently discovered I'd been paying basic rate even after the business closed down. Being told that I can claim that extra tax back (£2500 ish) I've discovered after going though my books in order to redo my tax returns,  i'd calculated it wrong! (we made a loss but still.)

I have a detailed list of income/outcome for the entire life of the business, but the trouble I have is that our business bank account was cheque/cash card only so I couldnt make payments on the card, therefore I had to make purchases out of my own pocket. I have receipts and statements from both my business and personal accounts so that's nothing to worry about either.

What i've screwed up on is cash withdrawals to make cash purchases. The problem is, both myself and my partner initially paid ourselves wages, but due to low business sales we had to put that money back into the business account to cover direct debits, and as I mentioned earlier, make payments via my personal debit card.

All in all, during our first month trading, we had £2500 part loan part grant, about £190 from test trading, £40 for sales, and I paid in £40 cash at the end of the month. the only outgoings from the business bank account was cash withdrawals. Everything else was personal debit card payments and cash payments.

so I have this pool of money that was left over and it circulated from being personally borrowed to pay personal bills and food, to being put back into the business via cash purchases or deposits.

I havent a clue how to balance my books because of it (and I took a bookkeeping course but the format used is not helping).

I would appreciate any help offered because business has been closed for two years now and these books are still hanging over my head! I want to cry :(

yours,
Hopelessly devoid of business sense.


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I would do a very basic income & expenditure account. You say you have all the receipts for expenses, so analyse those out. I shouldn't get too hung up on how they were paid unless you want to see who paid most out of you and your partner. For simplicity do a set of accounts to 5th April 2008 (6 months I know but that's fine it saves on you having to worry about tricky opening years basis). This will form the basis of your 2008 partnership tax return. Your personal tax return will show your share of any profit or loss and you will need to show any other income/tax paid to 05.04.08. Next prepare a basic I & E account from 6th April 08 to cessation. This will form basis of 2009 tax returns along with employment income etc. HMRC will just be happy to close this, they are unlikely to ask to see your accounts just your self assessments.

Alternatively, go and see an accountant and ask for a quick and simple resolution to the problem, if there is this much over paid tax to reclaim then it will be worth it and the loss can be offset against other earnings.

Rob

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Rob
www.accounts-solutions.com
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