New Business - Fixed Assets - The Book-keepers Forum (UK)

Sheena · Member

New Business - Fixed Assets

Cheshire · Master Book-keeper

Hi Sheena
Welcome to the forum.

We usually ask for an intro, you have given a small part. But a bit more is useful. Is your licence with AAT? If not who is your MLR with? Are you continuing to do level 4, how far are you in?

There is not enough detail to answer your question.

You state this is a new business. So were the costs incurred pre creation of the Limited co (if indeed it is a limited co/is it a pre trading cost?

You state they bought an existing business. So what does the invoice cover? Any element of advice to Directors? Assignment of lease involved? You dont mention the invoice.

Is there VAT involved?

You would need to be careful if you are under the terms of an AATQB licence as you are restricted (never mind PII) - this is of course depending on what your licence covers. So please advise.

Who is doing the payroll for this lot?

-- Edited by Cheshire on Thursday 19th of December 2019 02:09:42 PM

Sheena · Member

Hi

I have not applied for a licence yet, I am thinking about doing the level 4 but I was hoping to gain some practical experience before doing any further study. I am with HMRC for MLR.

This was a payment on the bank statement which I queried with the owner, who advised it was a payment to the solicitor for part of the purchase price. I have asked for an invoice to show the VAT element and any other details, but I am waiting on the owner sending this to me. I thought I would get prepared for how to post this whilst waiting on the further details.

This is a Ltd company and the costs are incurred after the creation of the company, and I think pre-trading (I will need to get the invoice to see the exact dates)

Payroll is being done by the accountant.

Any advice would be greatly appreciated, as my only other involvement with Fixed assets for my other client, has been to just post invoices for new printer, and a car, anything else has been done by their account.

Sorry I don't have a lot of details yet, but was looking to see if this should be accounted for as a fixed asset or put through as a legal fee.

Cheshire · Master Book-keeper

You will be less restricted in what you can do (subject to your PII of course) by staying with HMRC, albeit pay a lot more for your MLR with them.

Im sure I dont have to say, get a piece of paper for anything £££ related that moves.

If the invoice is holding things up, but only considerably so, eg doing a bank rec, then just leave it as a payment on account to a supplier account in the solicitors name. That way you dont need to worry about expensing/capitalising it and indeed there will be no VAT issues to consider.

Feel free to pop back on once you have it, although given they have an Accountant you may wish to flirt it via them. Some of the bill may need to be dis-allowed, VAT might be an issue and unable to be re-claimed - certainly in the absence of facts we cannot advise/confirm.
If you are happy with the VAT regulations covering it once it does arrive then key it as an expense and highlight it to the Accountant for possible adjustment at the year end.

OK on the payroll - just thought I would mention PAYE Tronc if you were doing it in the event you were not aware.

Hope you will be a regular on here.

Please can you complete the MTD feedback - see another post - as requested by the Chartered Institute of Tax (you dont need to be a member!)

Sheena · Member

Thanks for your help.
I will just post it to the Supplier account as an expense (as you have suggested) and let the accountant sort it out when we get the invoice.

I have never been involved with payroll and had not heard of PAYE Tronc, so thanks for telling me about it. Payroll is not something I want to offer as a service, maybe later when I have studied further.

Many thanks for the advice.

Cheshire · Master Book-keeper

I meant post to supplier as payment on account (which will not go near the expenses), but will sit as a debit on the AP, bt only because you haven't yet got the invoice.