When I first started my business in 2014 I used £2500 of my own money to purchase stock and packaging etc, but I didn’t know to put this down as a director’s loan, instead I created an ‘imaginary’ current account in Quickfile with a -£2500 balance. Can I put the £2500 down as a director’s loan now all these years later and then delete the ‘imaginary’ current account or set the balance to zero?
Also, the -£2500 balance isn’t shown on my submissions to HMRC, I don’t know why but only current assets are there, which is cash in a paypal account and remaining stock, but no liabilities so HMRC don’t appear to know about my initial personal cash injection, either that or I’m just not understanding accounting terms. Have I screwed this up beyond repair and will I go to prison when I link up to HMRC for digital filing and they see that things don’t match? The company has been dormant since 2017 and has never made it into profit so no tax evasion to worry about, but I do want my accounts to be ‘proper’ and I would like to get my £2500 back at some point in the future when I start trading again.
Everything in Quickfile appears to be correct apart from the ‘imaginary’ current account instead of a directors loan, but I appear to have completely screwed up transferring that information onto my submissions to HMRC.
Unfortunately this is a one man show as the business doesn’t have the cash for accountants. If this can be fixed then I have to fix this myself.
What I should have done is open a separate business account, put the £2500 in that and recorded the £2500 as a director’s loan, but instead of doing that I carried on as though I was still self-employed and paid for things using my personal account. All the figures in Quickfile are correct though.
This is the discrepancy between Quickfile and HMRC. Quickfile is correct but HMRC isn’t and I have no idea why. I had no idea what I was doing when I first started using Quickfile (still don’t) so I must have been transferring data from the wrong area or something, probably clicked the wrong button when creating year end accounts.
Balance sheet for 21/22 in Quickfile:
Capital and Reserves: -1,294.82
Balance sheet for 21/22 with HMRC:
Capital and reserves: 1,468
Is there any way I can correct this pickle I’ve got myself into? Could I just file the correct amounts next time and hope they don’t notice? What about if I link up to HMRC for digital filing and just click the ‘file accounts’ button?