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Tax return: can my cash account be negative?

(6 Posts)
NeopreneMermaid Wed 22-Jun-16 14:36:32

This is my first corporate tax return and I'm tying myself in knots. I have a limited company but I'm the only person employed. For the tax year in question, I made a loss (this year is looking a lot better!).

Customer payments came into my business bank account but I paid for all purchases out of my own personal money and have not paid myself back from the business.

I'm using ready-made spreadsheets from DIY Accounting. I've filled in my sales and purchases and monthly bank current account transactions.

Now I come to the cash account. Should I:

1. Allocate all my purchases to the cash account, i.e. treat my own personal money as the company's cash account? This seems wrong but is basically how I work
2. Treat myself personally as a creditor who has bought all the business supplies on expenses and not been reimbursed? It seems that if I do this though, it appears as though the business has made no purchases and all the supplies for the work have just appeared out of thin air. confused
3. Do something else that hasn't crossed my mind.


NeopreneMermaid Wed 22-Jun-16 14:39:29

Sorry, I should have also said that if I treat my personal money as the company's cash account, then the cash balance will be negative, which is of course impossible when the figure is supposed to be the physical cash I've counted. Or are you allowed to do this?

Or, can I do this and then reconcile the difference by saying that I (as a director) personally invested £xx to make up the shortfall?

Badbadbunny Wed 22-Jun-16 15:25:03

It's your director's loan account that's paid those expenses, not the company's cash. The balance that you've paid on behalf of the company is simply a creditor, i.e. the company owes you that money. You show it as a creditor on the balance sheet.

NeopreneMermaid Wed 22-Jun-16 16:47:36

Thanks Bunny. So I still complete the purchases sheet then?

Badbadbunny Thu 23-Jun-16 09:24:08

I'm not familiar with that spreadsheet system so don't know how you'd enter such transactions so that they end up in the right places. I'd suggest you contact the provider directly as they should have some kind of support facility.

IceMaiden73 Tue 28-Jun-16 17:32:23

Get an accountant

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