I have a question.
I have LTD with the financial year from 01.06.2015 - 31.05.2016. During this time I have made the payment of £300 advance as a corporation tax liability which will be due after 31.05.2016. I have paid £300 to HMRC.
Now I have calculated the corporation tax for 2015/2016 for example £1500. Of course I will pay £1200 (£1500-£300).
My question is how record my payment of £300 as an advance payment of corporation tax on P/L and/or BS for 2015-2016
Somebody help?
Many Thanks
Mady
Replies (8)
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The 2015/16 accounts should show a tax charge on the P&L of £1500 and a creditor of £1200 owed, the difference being your £300.
It should have been recorded at the time you made it. You need to do whatever you need to do to correct the error.
It depends what went wrong. Did you not enter the £300 at all or did you post it somewhere else ?
The entry when you made the payment would be to debit taxation provision on the balance sheet and credit bank. Then when you do the accounts you debit tax charge on the P&L and credit the taxation provision resulting in the figures from my first post.
Do AAT. They cover basic debits and credits and the difference between P&L and B/S - or whatever the new terms are for them.
You'd learn loads
It looks to me like you need to get some help from someone who knows about bookkeeping and accounting. You will need it anyway when you come to do things like preparing the statutory accounts and filing the Corporation Tax Return.