I am trying to complete my corporation tax return but had it returned due to an error. HMRC are going to call me to advise.
My question relates to expenses. My current status in the company is that of sole trader to my own limited company. I will become employed in April.
I paid myself by invoice over the years trading (april 2014-2015 £65,000), although with the intention to delay tax liability I invoiced the company 31st March 2015 a further 20,000 then closed off company year and personal year. I then paid the amount May 2015 meaning I owe tax on this 20K by Jan 2016.
Assuming an accurals tax basis.
Company balance sheet shows- current liability of £25,000 and cash at bank of £20,000 with around £5,000 in debtors.
When completing CP16 directors remuneration: Do I include the 20,000 not paid along with the 65,000 actually paid? Is the CP16 box for actually paid remuneration or can I include accrued remuneration not paid in here? If I add the 20,000 into the box it reduces my corp tax liability, however if I include it in the box directors remuneration not paid my liability for corp tax doubles to tax due on £40,000. My understanding is that accured income and expense should be reported and accounted for in that period and that corp tax is on this basis and not a cash basis
Any advise here PLEASE!