Balance Sheet example

The balance sheet tells us the financial position of a business as at the date it was drawn up. Below is the balance sheet example that complies with the FRS102 format.

Successful Business Limited

Balance Sheet as at 31 December 2021Note
2021 (£)2020 (£)
Fixed assets
Tangible assets116,89019,050
intangible assets789895
Current assets
Cash at bank and in hand1,871,7651,836,009
Less: Creditors(76,923)(23,888)
Net current assets6,396,0233,376,238
Total assets less current liabilities6,413,7023,396,183
Long term loan(10,000)(10,000)
Net assets6,403,7023,386,183
Capital and reserves
Call up share capital1,0001,000
Retained Profit6,402,7023,385,183

Overview Successful Business Balance Sheet position

Successful Business Limited balance sheet example tells us, the company is healthy and strong. Its cash at the bank and in hand can cover its short term creditors in both accounting years.

Compulsory filings with the UK authorities

You must deliver your company accounts, confirmation statement to Companies House when they are due. In addition, you must also deliver your company accounts which include your balance sheet together with your corporation tax return to HM Revenue and Customs.

You will receive a late filing penalty if your company accounts are filed late.

If you require help with your company accounts and confirmation statement preparation and filing, feel free to contact our accountants they would be more than happy to assist you.

Dividend from small company

Many entrepreneurs set up a limited company for business because it is easy, quick and affordable to incorporate a limited company in the UK. One of the ways they can withdraw money from their companies is through dividends payments. You must declare the dividend from your small company in your self-assessment return.

Before declaring your dividend

Generally, you can only declare a dividend from your small company when you have sufficient profits available for distribution after paying corporation tax.

You will include the dividend declared in your company’s profit and loss account and also in your balance sheet as the dividend payable if the dividend will be paid after the accounting year ended.

Dividend Received

For example, you are the sole director and shareholder of your limited company. Your company made a profit of £100,000 before corporation tax and after your director’s salaries a total of £50,000. The corporation tax rate is 20%. You would like to withdraw £8,000 from your company.

Profit and loss account2021
Profit before tax£100,000
Less: corporation tax @ 20%(£20,000)
Profit after tax£80,000

In this instance, you can pay yourself a dividend of £8,000. Correspondingly, you must declare this dividend received from your limited company in your self-assessment return. You must register with HM Revenue and Customs to get your Unique Tax Reference (UTR) number for filing your self-assessment return.

Dividend allowance

The great news you do not pay tax on the full amount of dividend of £8,000 received. The UK government is kind, understanding and generous to the taxpayers.

Tax yearDividend allowance
6 April 2020 to 5 April 2021£2,000
6 April 2019 to 5 April 2020£2,000
6 April 2018 to 5 April 2019£2,000
6 April 2017 to 5 April 2018£5,000
6 April 2016 to 5 April 2017£5,000
Source: GOV.UK

Tax on dividend

Your company do not pay tax on the dividend you received but you do. The tax you must pay on your dividend received is depending on your total earned income for the tax year and your income tax band. Please note that the income tax band is different from the dividend tax band.

Dividend tax bandTax rate
Basic rate7.5%
Higher rate32.5%
Additional rate38.1%
source: GOV.UK

Calculate tax on dividend

Dividend received£8,000
Total earned income for the tax year£58,000
Less: Personal allowance for 2020/2021(£12,500)
Taxable income£45,500
Tax on:
Salary at the basic rate of 20% (£45,500 – £8,000)£7,500
Dividend at the basic rate of 7.5% (£8,000 – £2,000)£450
Total tax bill£7,950

Confirmation statement

Another important document you must prepare for your company is your confirmation statement at least once every 12 months and submit it to Companies House. Failed to file this document may result in your company being struck off the Companies House register.

If you require help with your company accounts and your self-assessment return and confirmation statement filings, please contact our accountants and they will be more than happy to help you.

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