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Corporation tax repayment

I have made a loss in the year of £9000 and therefore have a corporation tax credit of £1910 that can be carried forward.  How do I report this in my accounts?  Am I correct to show a credit posting of £1910 in my P&L after PBT? If so, what is the corresponding balance sheet posting?

Many thanks

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28th Dec 2011 12:49

No!

PBT  = PAT  and there is no debtor, as there is no benefit to you until there is tax to pay (i.e. if/when you make a profit). By implying otherwise, you are overstating your assets at the BS date.

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By neileg
28th Dec 2011 13:45

Bit more

The prudence principle tells us that you only recognise an asset (i.e. your CT credit) if you have good reason to believe that it is realisable. Otherwise, as WhichTyler says you are likely to be overstating your assets. This doesn't mean the credit is lost, your tax losses roll forward anyway.

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28th Dec 2011 18:12

It goes in LT Debtors

But as indicated above should be subject to an impairment test which may well reduce the value of the asset to nil

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28th Dec 2011 19:07

If you had carried the trading losses back to the previous year and if this resulted in a CT repayment then the journal in the current year accts would be DR Other Debtors, CR CT P&L

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30th Dec 2011 12:28

deferred tax on losses

is the subject you need to look up............if you decide there is an asset after your deferred tax  liabilities....

it will be treated as deferred tax asset....in the normal way.

Surely your accountant does this for you ?

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