Accountants – The Scourge of Business

Since setting up a limited company a few years ago, I have discovered the full horror of accounts. I would be the first to acknowledge that keeping accurate accounts is important. I would also admit that my own record-keeping has left something to be desired. However, the complex business of submitting accounts for a limited company to Companies House and HMRC is so time-consuming and expensive that it is surprising there are so many SMEs (small and medium-sized enterprises) around. If the Chancellor wishes to bolster the economy, he would be well-advised to simplify this area.

In theory, small companies can submit simplified forms to both Companies house and HMRC (Her Majesty’s Revenue & Customs). Unfortunately, the rules exclude the use of the short tax return for companies with foreign earnings. In effect this means that there is an enormous disincentive for British companies to export goods or services.

That, in itself, would be bad enough, but HMRC doesn’t provide any mechanism for creating the full accounts in the required iXBRL. Instead, the company has to find a way of converting its statutory accounts to this format – not an easy matter. You can then attach the iXBRL version of the accounts to HMRC’s online form. The problems really start when you need to attach a form containing information on loans to participators. As far as I can see, there is no way to do this unless you fill in the short accounts, which you shouldn’t do if you’re attaching full accounts.

There are ways around this. I’m converting my accounts to iXBRL using a template from TaxCalc and I’m going to submit the tax return, with the converted accounts attached, using CallCredit Ftax. However, all this is taking up weeks of my time in which I cannot be earning money, either for myself or the the Exchequer.

The answer must be to employ an accountant, surely? Not if my experience is anything to go by. I am having to submit two returns this year, one correcting all the mistakes that my accountant made last year. I am still to angry to go into details of all the problems but here are some of the highlights:

  1. She told me the accounts had been submitted when they had not.
  2. She failed to reduce the tax bill by using capital allowances
  3. She included the wrong figures for cash in the bank. I should have noticed this but she had all the paperwork at the time.
  4. She failed to inform me that 25% tax was levied on loans to participators.

That is why I have decided to do the whole thing myself. I am not really comfortable doing this but I’ll certainly do a much better job than she did.

Many people who have used solicitors to handle probate will probably have a sense of déjà vu reading about the relative merits of employing a professional. In my experience, it is far quicker and easier to handle probate yourself than to pay a solicitor to do it. The few thousand pounds you pay for such services are really beneath their contempt, so the work is handed to some over-worked dullard (of which there seems to be a plentiful supply in solicitors’ offices). You end up paying the solicitor to do in years what would have taken you a few months.

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