Ltd Company Accounts

System
System Posts: 100,537 🤖 Admin 🤖
edited June 9 in General accounting discussion
Can anyone help me please?

Trying to sort out mess from an old firm of accountants - high street chain, no qualifications :twisted:

Directors P60 shows salary of £5,035 for y/e 31.03.07 inclusive of £1,639.44 SMP. Salary not paid and SMP not reclaimed :twisted: :twisted:

In the books I have got
Dr Debtors £1,639.44
Cr SMP reclaimed £1,639.44

How do I show the £1,639.44 in the accounts - ie extra income or netted off against salary? If it is income, is it taxable? If not, how do I keep it out of tax comp on PTP?

Brain getting very confused now :roll:

Thanks chaps and chapesses.

Claudia

Comments

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Ltd Company Accounts

    Hi Claudia

    The salary would have been credited to the directors' account, the client has probably told you they have never been paid it?

    As for the SMP, presumably this would have been a credit within the p&l as other income? This should have been taken care of by the previous agents in the tax comp, although I can't see why it would be shown here :? so nothing to do here.

    The debit in debtors will either be adjusted by a banking or netted off against the PAYE control account.

    If they are both balance sheet entries then they seem pretty pointless to me :roll: if you are happy with the current PAYE control account i.e. it's showing the correct position just net them off to remove them from the accounts.

    Regards

    Dean
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Ltd Company Accounts

    Hi Dean

    Thanks for that but it is last year's accounts that I am trying to do.....

    The PAYE control account is zero (due to £5,035 salary) so only a credit of £1,639.44 - but surely the debit in the debtors needs to stay, as it is a "real" debt and if I hassle HMRC enough they might even pay it up :wink:

    The only way round it that I can see (obviously) is to net off the SMP reclaimed against salary, which I suppose is the "true" cost to the company - but somehow doesnt seem right.

    What would you do?

    Claudia

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Ltd Company Accounts

    Shouldn't the PAYE control account show a debit of £1,639.44. That then sorts your problem.

    Then chase HMRC for a cheque:
    Dr: Bank
    Cr: PAYE control

    I would have a look at your control account again or can you explain this a bit further
    The PAYE control account is zero (due to £5,035 salary) so only a credit of £1,639.44

    It's either zero or in credit?

    Regards

    Dean
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Ltd Company Accounts

    Sorry Dean - not being very clear PAYE control account shows credit of £1,639.44 - what I meant about the zero was that there was no other activity going on like PAYE or NICS to net off against :oops:

    Perhaps then the answer is to just show a credit in the PAYE account..... will see what that looks like.

    Claudia

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Ltd Company Accounts

    Yeah that is the answer; credit in the control account being carried forward. TB will show as a debit so when posted to the balance sheet it shows as a debtor. :)

    Regards

    Dean
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Ltd Company Accounts

    Hi Dean

    Yeah - that looks better now - the accounts have netted the salary off against the SMP and the outstanding money is showing as that in the balance sheet - problem solved :D Just got to the stage where I couldnt see the wood for the trees.

    Thanks again 8)

    Claudia

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