UK - Putting US Funds on Accounts

**incka** · 01-14-2005, 10:12 AM

Hello

It's not long before my company is a year old, and after that I have 9 months to send accounts in. One thing puzzles me though - How do I include US Funds, such as those in my paypal or those in cheques, into GBP£? Do I do it on current exchange rate or the exchange rate at the time, and do I do it at tourest rate, bank of england rate or what? And if it's the rate at the time, how do I find the rates from each day in the last year?

**MarkB** · 01-14-2005, 10:19 AM

Ask your accountant

**Blue Cat Buxton** · 01-14-2005, 10:23 AM

Then let us know

**chromate** · 01-14-2005, 10:24 AM

You're probably gonna have a nightmare getting all this info together. You probably should have recorded this as you went along. Have you been putting money aside for corporation tax?

I base my accounts on the actual GBP I receive after cashing the cheques, as that is my income. Though, being a limited company, your accounts will be more complex. I just fill in a self assessment tax return online.

**incka** · 01-14-2005, 02:34 PM

Corporation tax? My company isn't going to make much profit you know - It's gonna break even, but it's still gonna be within the Gordon Brown 10k tax free profit thingie. I invest everything I earn in my business.

**r2d2** · 01-14-2005, 03:59 PM

I dont think reinvesting it means you havent made any profit. Cash != profit. Dont know for sure, but just having roughly the same amount of cash doesnt mean you wont pay tax.

**incka** · 01-15-2005, 01:58 AM

No, investing means I've spent the money = expenses.

**aj8** · 01-15-2005, 05:34 PM

If you've made no profit, then you will not pay any corporation tax. However, your first £10k isn't necessarily tax free. I formed my company in Y2000.

My first year was BEFORE the first 10K freeby band and I paid a little bit of tax on my profit.

The second year was also BEFORE the 10k freeby band, I paid quite a chunk of tax on my profit.

Third year was AFTER the 10K freeby band and I ended up paying a fair bit less than Y2! (hooray!).

They changed the rules. For small firms, first 10K band %age is now calculated on a sliding scale, based on profit and dividends declared. If you declared no divis, it'll probably still be tax free. If you did declare dividends, it won't be. FYI in year four I made LESS pre-tax profit, but because of the dividends I took, I paid a lot MORE tax than the year before..

Essentially it's my belief the chancellor either :-

Made a mistake, didn't realise the 10K tax free thing would encourage loads of people to incorporate...

OR

Knew this would happen and executed a classic 'bait and switch' con trick on the entrepreneurial population :<

Either way ask your accountant....

A.

**incka** · 01-16-2005, 11:15 PM

Accountants are a waste of money IMHO.

I'm not giving dividends...

**Blue Cat Buxton** · 01-17-2005, 01:52 AM

Incka

If your aim is to really grow your business and diversify - youve mentioned property before, I think - then you really need to find a good accountant. They can save you far more than they cost.

As the business grows and the tax man comes along and has a look around, an accountant will help then as well.

**chromate** · 01-17-2005, 03:04 AM

Exactly. At the moment as your business is so small, you will probably be fine doing your own accounts. But when you start paying employees, VAT etc then I think you should get an accountant, even if you use one to just check over the accounts that you've produced. They will likely be able to save you a lot of money in tax that you didn't think possible.

If you misunderstand something and make a mistake, without an accountant to point it out, then you could end up with a huge tax bill that your business may not be able to support. Then, goodbye business.

**AndyH** · 01-17-2005, 05:27 AM

Originally Posted by incka

Accountants are a waste of money IMHO.

I'm not giving dividends...

...

**MarkB** · 01-17-2005, 06:08 AM

If you run a business, a good accountant is a must. An excellent accountant is a godsend.

**moonshield** · 01-17-2005, 08:49 AM

Really? In the United States taxes are not THAT high... If one keeps decent records an accountant is not necessary, the Internet really helps, online banking is indeed very useful.

And then you just use a program like Tax-Cut and it computes your taxes with deductions and everything.

If you are paying 50% of your income... well, um move somewhere else.

Question: Is the tax code complicated where you live? Or are taxes just really high? or what?

**incka** · 01-17-2005, 09:14 AM

Originally Posted by chromate

Exactly. At the moment as your business is so small, you will probably be fine doing your own accounts. But when you start paying employees, VAT etc then I think you should get an accountant, even if you use one to just check over the accounts that you've produced. They will likely be able to save you a lot of money in tax that you didn't think possible.

If you misunderstand something and make a mistake, without an accountant to point it out, then you could end up with a huge tax bill that your business may not be able to support. Then, goodbye business.

That's my plan. I meant for a business in my position an accountant is a waste of money when Companies House sent a cd-rom that tells you how to do all the accounts and such...