Trading, tax and audits

Discussion in 'Taxes and Accounting' started by gifropan, Mar 3, 2012.

  1. For the past few years I have been trading futures in the UK. I trade as a limited company. As a limited company I have to be audited every year and in recent years I find that the audit fees are quite expensive. Although my profits and losses are small ( in the region of 10k to 20k) my auditors tell me that their fee is proportional to my turn over. As I'm sure Elite Trader members are aware turn over when trading futures can be very misleading. For example if I buy 4 lots of FTSE at say 5800 and sell them at 5815 my profit will be £600 but my turnover is £232,000. So if I do this 3 or 4 times a day my turn over would be over a million a day or nearly 300 million a year which is very misleading. My profit and loss for the year may be around 15000 a year and sometimes out of that I have to pay between three to four thousand pounds audit fee. This is because the audit fee is based on a turnover of 300 million pounds

    My auditors tell me that this is the only basis that they know on which limited company fees can be based. I think most auditors are perhaps not familiar with the futures market and I am not sure if this advice is correct. I would be grateful if any one knows a different way that a limited company engaged in futures trading can be audited so that fees are not based on turnover only.