Hi,

Just bought Solar Accounts. Wish I'd done it a year ago! :)

Quick question regarding my first financial year end. I incorporated my company on 21st March 2011, so the books were set for the first financial year to run until 31st March 2012. That's apparently normal.

However it kinda messes up my financial year repoting. I've received two notices from HMRC to deliver company tax returns for two periods: 21/03/2011-20/03/2012 which is the first year, and then another for 21/03/2012-31/03/2012 to make up that extra week or so.

I've set up my Solar Accounts file as having financial year start date of 21/03/2011, which seems to be fine for the first return, but how do I account for the second one, 21/03/2012-31/03/2012?

My specific problem is that the company has been funded by me for a year, so I've a director loan of a couple of thousand quid owed back to me as sole director. I can account for that in the first return, as everything is there, but how do I "carry over" the liability and report for it in the second return?

I'm guessing I need to close the first financial year, but then that would make it run 21/03-20/03 every year, when I need to have it run a mini financial year from 21/03/2012-31/03/2012, and then pick up the normal yearly pattern again from 1/04/2012 onwards.

Am I making this more complicated than it needs to be?

Thanks in advance
L

Hi Lee,

Here's what you need to do:
1. Enter all the transactions for the period 21/03/2011 to 20/03/2012.
2. Click menu Setup > Financial Year > Start a new financial year. Leave the start date as 21/03/2011 and ignore the end date, then click OK.
3. Enter all the transactions for the period 20/03/2012 to 31/03/2012.
4. Click menu Setup > Financial Year > Start a new financial year. Set the new start date to 01/04/2012
5. Go to the reports list and view the Profit and Loss report, then click the 'Configure' button to set the date range to 21/03/2011 to 20/03/2012. Use this as the basis of your first tax return.
6. Repeat step 6 with date range 21/03/2011 to 31/03/2012 for the second tax return.

Note that the directors loan are automatically carried forward each year (as are all asset, liability and equity balances).

Also, I recommend you check with HMRC that they want two separate tax returns. I'd have thought they would want one return covering the period 21/03/2011 to 31/03/2012.

Regards,

Thanks for the quick reply Mark, that's pretty much what I'd done but got worried when I was showing a profit for the few weeks in March 2012, which I'm guessing I'd have to pay corporation tax on, even though there's an outstanding -£2k in director loan costs for the previous year.

I can see that "loss" in the balance sheet, but not the P&L. I guess that'll work itself out with the tax return as nil tax due.

I was wondering about the two return notices. It did seem to go against what Companies House was telling me. I'll give HMRC a call tomorrow. If I can get it down to one submission then this whole problem will likely go away.

Thanks for the advice. Much appreciated!