Case Study – Dealing with a Limited Company’s Accounting Nightmare

An accountant can get your business, and your life, back on track

There’s lot to think about when starting your own business and finding the right expert business and accounting support from the beginning makes a huge difference. However, it can be even more important at the end of a business, or if things go wrong.

Case study: Dealing with a limited company’s accounting nightmare

Business owners usually come to us at the start of their business or when they plan to expand, but recently a business owner came to us because they had fallen four years behind in filing their accounts and tax returns.

They had finally been persuaded to do something to get out of the hole they were digging by ignoring their situation.

Running a limited company isn’t for everyone

Our new client had set up their business as a limited company, feeling it was what they ought to do for limitation of liability and tax reasons, after listening to the received wisdom at the time.

However, running a limited company is a complex operation and it doesn’t suit everybody. For this individual, it led to anxiety over the accounts, VAT returns, tax returns and other obligations, which wasn’t helped by an accountant who was too expensive for them. They were afraid to even call their accountant as they knew they would get a bill, even for a call of a few minutes.

As a result, they didn’t ask for help, their problems got worse and they fell further and further behind.

Catching up on four years of accounts in two weeks

However, when they finally came to us with their concerns, we were able to provide three things they really needed: advice, support and action.

• Within two weeks we had sorted through their records and brought their accounts and tax affairs up to date;
• As a result, we secured a VAT refund for them of over £10,000, which funded the closure of their limited company and gave them something extra to start afresh as a sole trader; and
• As the business was being closed, we negotiated with their bank so that they didn’t have to repay a large overdraft or their credit card debt as there were no personal guarantees here.

After addressing all the existing issues our client was able to continue their business in the much simpler and easier format as a sole trader, which better suited them.

Black and White Chartered Accountants work on a fixed fee basis, so there are no surprises. Clients can even spread the cost by paying monthly by direct debit, with no extra charge for calls and advice throughout the year, so our new client is now confident they could receive the accounting, tax and business advice they needed to avoid falling behind again. We also proactively chase our clients, so as soon as a time period has ended, we will be in touch, with increasingly levels of keenness, as we get closer to any deadline.

Knowing our clients

Taking time to get to know the client and business enabled us to realise quickly that their enterprise structure wasn’t for them on a personal level or for the way they worked.

For us, business is about more than doing your accounts and filing tax returns; seeking advice from the outset, from accountants with expertise in supporting businesses, can help an entrepreneur put their business on the right foundation, not just on tax considerations but for them personally. This can avoid subsequent problems and heartache when the burden of running a limited company becomes too much to bear.

No matter how bad your situation, act now

Most accountants offer a free initial consultation so, if you are thinking about setting up a business, take this opportunity to find one you feel you can work with for the long term.

On the other hand, if you are struggling to manage your business, don’t delay in acting. At Black and White Accountants, we don’t make judgements about your situation; we are here to offer practical advice and to support you at each stage of your business journey, you are no longer alone.

If you would like further information about how our specialist business accounting and advice team can help you, contact Black and White Chartered Certified Accountants today, or call us on 0800 140 4644.