Negative Balance Sheet: What It Means and How to Enter the Figures

If your company has made a loss, your balance sheet may show a negative total — meaning the company owes more than it owns. This guide explains how negative figures are displayed in TinyTax and what you need to enter.

What a Negative Balance Sheet Means

A negative "Capital and reserves" (also called "Net assets / liabilities" or "Shareholders' funds") means your company's liabilities exceed its assets at the year end. This is common for:

• Start-up companies that have spent more than they have earned
• Companies that have made a trading loss
• Companies where the director has drawn more than the company has earned

This is a legitimate accounting position. The accounts are correct — there is nothing broken and nothing to "fix".

How Negative Figures Appear in the Accounts

In UK accounting convention, negative figures are shown in brackets, not with a minus sign. For example:

Display in accounts	Meaning
(2,983)	−£2,983
(5,319)	−£5,319

You will see this in both the TinyTax form and in the generated PDF. The figures shown in brackets are negative — this is correct and expected.

What to Enter in the Balance Sheet

You do not enter a negative number for "Retained earnings" or "Capital and reserves" — these are automatically calculated by TinyTax.

Enter only the raw asset and liability figures:

1. Current assets — cash at bank, debtors. Enter as a positive number (e.g. `2337`)
2. Creditors: amounts falling due within one year — money owed by the company. Enter as a positive number (e.g. `5319`). TinyTax handles the sign automatically.
3. Called up share capital — the nominal value of shares issued (usually £1 or £100). Enter as a positive number.

TinyTax then calculates:

• Net current assets (liabilities) = Current assets − Creditors
• Net assets (liabilities) = Net current assets + any fixed assets
• Retained earnings = Net assets − Share capital
• Capital and reserves = Share capital + Retained earnings

If your liabilities exceed your assets, all of these calculated totals will be negative and will appear in brackets automatically.

My Form Shows the Correct Brackets — What Next?

If the balance sheet totals are showing in brackets and the PDF preview looks correct, your accounts are ready to submit. The bracket notation confirms TinyTax has correctly calculated the negative position.

Check that:

• The Capital and reserves figure matches what you expect (e.g. (2,983))
• The balance sheet balances — Capital and reserves should equal Net assets (liabilities)

If both look right, you can proceed to submit.

Common Questions

The form shows "2,983" in brackets — is that the same as −£2,983?

Yes. In accounting, (2,983) means −£2,983. You do not need to enter a minus sign — the brackets tell readers the figure is negative.

Do I need to enter a negative number anywhere?

No. Enter all asset and liability figures as positive numbers. TinyTax applies the correct sign automatically when calculating totals.

My Capital and reserves shows a large negative — is that a problem for filing?

Not for the purposes of filing. Companies House and HMRC both accept accounts that show negative equity. However, a persistently negative balance sheet may have implications for your business (e.g. director loan repayment, solvency), so it is worth reviewing with an accountant if this continues year after year.