pikestaff
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Post by pikestaff on Jun 1, 2014 22:18:40 GMT
That's why I said "in principle". I agree the impact will rarely be significant. However, in cases where cash accounting would clearly be aggresive (such as gross roll-up loans where interest is paid only at maturity), I think HMRC would take a pretty dim view of cash accounting by companies.
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duck
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Post by duck on Jun 2, 2014 6:23:26 GMT
That's why I said "in principle". I agree the impact will rarely be significant. However, in cases where cash accounting would clearly be aggresive (such as gross roll-up loans where interest is paid only at maturity), I think HMRC would take a pretty dim view of cash accounting by companies. That is an interesting point for those of us who invest as Ltd Co's and perhaps one that has not been considered fully in the past (certainly not by myself).
If for instance a company was being run down over a period of years (which might well be appropriate for me in some years time) it would be very 'simple' to take a spread of 3-5 year gross roll up loans timed to pay out when trading profits are low/nill. I feel in the current atmosphere the 'dim view' would be taken. As for sold on loans with accrued interest, that might be easier to deal with.
I agree and imho therein lies the problem. Since the number of HMRC investigations of small companies has expanded exponentially in the last year (and this trend looks destined to continue) I wonder how good HMRC are at verifying individual spreadsheets and scripts? I know from my professional life what a time burning and 'mind expanding' task this can be ........
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pikestaff
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Post by pikestaff on Jun 2, 2014 15:45:41 GMT
I agree it's a nightmare, and if the numbers are small enough I'd be tempted not to bother (but be ready to convince the tax man that they really are small). That said, it should not be a massive amount of work if you can cope with simple spreadsheets.
AC actually has the information required, albeit not in easily downloadable form. "Your Loan Units" on the Dashboard shows accrued interest. Click and drag to highlight all the loan units, Copy and Paste Special as text into Excel, then total the accrued interest column. You would only need to do this at the end of each financial year. However, you'd need to do it in real time, because the data is not stored.
RS is a real time Copy and Paste job (from "Your Money On Loan"), but more complicated because (1) it needs to be done separately for each duration; (2) it does not come into Excel very nicely, with extra work needed to get the balances into a single column; and (3) the accrual is not given (but the next payment date can be used to calculate a good estimate of the accrual).
On TC, you'd need to download the DO list as an Excel file at the year end, remove expired items, add a column for the most recent payment date, if any (generally the 12th of the month), and calculate the accrual from the interest rate provided. This need not be done quite in real time, because of TC's manual processes. Within a few days of the financial year end should be fine.
That's all the platforms I'm active on. I don't know about the others.
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