Turnover comprises the invoice value of administrative services provided by the company, exclusive of trade discounts and value added tax.

Provision of services

Revenue from the provision of administrative services is recognised when the services have been rendered to the client and the amount of revenue can be measured reliably and it is probable that the associated economic benefits will flow to the company and the costs incurred or to be incurred in respect of the transactions can be measured reliably. This is usually when the services are performed and the company has a right to consideration.

Current tax represents the amount expected to be paid or recovered in respect of taxable profits for the financial year and is calculated using the tax rates and laws that have been enacted or substantially enacted at the Balance Sheet date.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more tax in the future, or a right to pay less tax in the future. Timing differences are temporary differences between the company's taxable profits and its results as stated in the financial statements.

Deferred tax is measured on an undiscounted basis at the tax rates that are anticipated to apply in the periods in which the timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date.

In the period ended 31 October 2024 the company recharged the employment costs it paid on behalf of FD Exchange Limited, and accounted for VAT on the recharges. During the year the directors established that no markup was due. Under the arrangement the company acts as paymaster and recovers the costs it pays at cost. Those recoveries are outside the scope of VAT. The markup income and the VAT was therefore recognised in error.

The error has been corrected by restating the comparative figures for the period ended 31 October 2024. The effect is as follows.

Statement of income and retained earnings, period ended 31 October 2024

                                                                                                                        As previously reported £                                     Adjustment £           As restated £

Turnover                                       1,347,954         (67,399)           1,280,555

Administrative expenses                        (1,280,556)              1            (1,280,555)

Profit before taxation                               67,398          (67,398)                  –

Tax on profit                                     (16,850)           16,850                  –

Profit for the financial period                         50,548         (50,548)                   –

Balance sheet, 31 October 2024

                                                                                                    As previously reported £                                      Adjustment £           As restated £

Debtors                                           509,126        (336,989)               172,137

Cash at bank                                          7,540              –                7,540

Creditors: amounts falling due within one year           (465,918)       286,441           (179,477)

Net assets                                           50,748        (50,548)                  200

Retained earnings                                     50,548        (50,548)                 –

The debtors adjustment comprises the markup and the VAT of £269,591 charged on the recharges. The creditors adjustment comprises VAT of £269,591 and corporation tax of £16,850. The correction has no effect on cash at either balance sheet date or on the results for the year ended 31 October 2025.