Getting myself tied in knots

[Bob Chalk]

Hi,
I set up a limited company a few months back, and have been doing the accounts myself, but am getting a bit confused.

I actually started contracting in mid-October last year, but I didn't set the company up until the end of December.

I sent the client invoices dated from mid-October, once I had the company set up (including registering for VAT).

Looking back, I don't quite understand what I was thinking of, and why I didn't set the company up before contracting. It was basically all a bit of a rush job.

Now, I need to get an accountant to sort things out, but I wondered if the folks here could give me a bit of a basic advice.

Given what I did (and the fact that I have been cash accounting), is it actually possible to claim the work before the incorporation of the company as income for the company?

If not, how will I need to account for the income?

Any advice would be greatly appreciated.

Thanks,
Mark

[cojak]

Get yourself an accountant and ask him, that's what you'll pay him for after all.

[Wanderer]

Given what I did (and the fact that I have been cash accounting), is it actually possible to claim the work before the incorporation of the company as income for the company?

I suppose you can bill for work done before your company incorporation but I'm not sure about the issue dates of the invoices being pre-dated. Until your company is formed, I can't see how it would be able to raise an invoice or get paid (as it wouldn't exist as a legal entity or have a bank account).

So you're right - you will need an accountant to unravel all this, we really help you here because we need detailed information. Get an accountant that you pay a monthly fee to so you can talk to them whenever you need to. I don't think your situation is a massive problem but you do need to sit down with someone and get professional advice straight away. They can then keep you on the straight and narrow.

Ask them about IR35, shareholders (perhaps you can income split with a non working spouse), salary etc.

There are a few accountants who post here or you can find a local one. There is a thread with accountant recommendations that may be helpful (should be a sticky really ).

Good luck!

[JamJarST]

Who were the parties in the contract?

[BlasterBates]

I don't see a big deal here because you invoiced after your company was created. The main thing is the money came into the company bank account after the company was formed. I'm sure nothing more than a note in the accounts is all that's required, if that. Just get an accountant to check. I don't think anyone at the Tax office is going to get too flustered about this.

[Alan @ BroomeAffinity]

Legally, I suspect if the company was not in existence, then it couldn't really have carried out the work and therefore it shouldn't be invoicing for it. But, in reality, if the agency isn't fussy then its unlikely to cause an issue.

[BlasterBates]

Legally, I suspect if the company was not in existence, then it couldn't really have carried out the work and therefore it shouldn't be invoicing for it. But, in reality, if the agency isn't fussy then its unlikely to cause an issue.

Yes but a company can come to an agreement and take over the contractor and bill the work. I don't see any problem with that. A written contract isn't required. You can agree whatever you like with the other contracting party, main thing is the invoice and payment were made to the co.

[JamJarST]

Yes but a company can come to an agreement and take over the contractor and bill the work. I don't see any problem with that. A written contract isn't required. You can agree whatever you like with the other contracting party, main thing is the invoice and payment were made to the co.

Without an initial contract though, isn't the OP opening themselves up to IR35 problems?