This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Just about managing

TheMrs
Posts: 24
Joined: Wed Mar 06, 2013 7:22 pm

Just about managing

Postby TheMrs » Sat Feb 04, 2017 4:03 pm

(Reposted here from Company Taxation)
Our small Ltd has been severely buffeted by the oil price crash and we are really just clinging on in terms of cash flow.

We had a rather large director's loan (£44,000) at end last year which we repaid in full near the beginning of this business year and also paid interest on it to avoid BIK.

Unfortunately despite my best efforts to screw down domestic spending we will end this year having taken another smaller loan from the Ltd of around £25,000. We had another large rate cut mid year which has meant that we could not repay the new loan from profits as expected. The new loan was taken around 6 months AFTER the old one was repaid and we had no original intention of taking any further loans having repaid the £44k.

So our year end in March will look something like this;

Assets
DLA £25,000
Invoices to be paid £5000

Liabilities
In Bank -£3,000
VAT £5,000
Corp Tax £18,000

Cutting it fine I'm sure you'll agree! However due to drastic cuts in business expenses, and a very much reduced requirement personally from dividends, we will start to see a fairly sharp improvement in cash flow from April and would hope to see current loan completely repaid with no new loans next year.

My query is this - as professionals do you look at this and think "Tax investigation! They're a disaster!" or does it look quite standard for small businesses? We have nothing to hide, have good accountant etc but it's just the stress I couldn't take on top of being so worried about the business and also suffering ill health.

With thanks for reading.

pawncob
Posts: 4275
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: Just about managing

Postby pawncob » Mon Feb 20, 2017 5:42 pm

I think you need some accounting and professional advice.
With a pinch of salt take what I say, but don't exceed your RDA


Return to “Tax Investigations and Enquiries”