BALANCE SHEET When sole trader ceases trading

parisstanojevic Registered Posts: 2 New contributor ?
This is my first forum post so apologies if it is posted in the incorrect place, but urgent help is needed!

I have a client who has ceased trading in 2011/12 and I am a little unsure on a few aspects. I would appreciate any replies in time to submit the SATR.

1) The previous accountant for my client used to construct a balance sheet, however my client only had two transactions in this tax year, therefore is it necessary to construct a balance sheet?

a)If not, what happens to the fixed assets? My client has kept the fixed assets for personal use. Do I write them all down as an expense on the p&l and then add back on the adjusted profit comp? Like I would depreciation?

b) I have some debtors bfwd which are net of CIS tax, when these are reversed at the beginning of the year, is the net amount reversed to sales? Or are they simply left as the income tax on these were already dealt with last tax year.

Thank you so much!
I look forward to hearing your replies.


  • wannabebean
    wannabebean Registered Posts: 72 ? ? ?


    As regards point number 2 - if the clients has kept the assets for his own personal use then the become a personal asset of the taxpayer. This means that the taxpayer (the owner of the business that has now ceased trading) has acquired the assets AT MARKET VALUE and the details must be recorded accurately since there may be a future CGT tax liability should the taxpayer choose to dispose of these assets.

    As regards the Sole Trader Accounts, these assets will need to be shown as being disposed of AT MARKET VALUE and any loss or gain on dispoal will need to be reflected in the accounts in the normal manner.

    Don't forget to take into account any OVERLAP profits.
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