Incorrect showing of tax in P&L for past years

Incorrect showing of tax in P&L for past years

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I have just been given some accounts to complete for the current year and I was given the accounts that had been drawn up for previous years. I noticed that the tax for each year in question was not shown in the year it related to and then put on the BS as a current liability. Instead there was no element of tax in the current liabilities for any of the years and the tax for any one year was shown in the next years profit and loss as an expense. The issue I have now is what to do with the tax for last year as it was again not shown on the P& L for that year. Am not sure how to go about correcting this, the amounts of tax calculated and paid across to the Inland revenue are correct, but are just not refelected in the accounts correctly......help!
Emma

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By User deleted
18th Jun 2008 16:50

Reason for question
Well said Fairie girl but there maybe a reason the question was asked,

The issues are for the person posing this question are:
Are you employed by a firm of accountants ?(as you say you have been asked to prepare accounts .)
If so were the accounts prepared by a member of your staff or firms staff
if this is the case put the whole file back on your friends desk and ask for another job.
I say this because the question raises so many possibilities chief of which of course is if they got the CT wrong they have not got a clue how do Co accounts and I would suspect that there will be more than one error.

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By AnonymousUser
18th Jun 2008 13:28

qualified?
Please don't lets bring that old chestnut again.
Qualifications don't guarantee competency, and vice versa.

If the previous accounts were prepared by an accountant (as opposed to in house) then the business may have some recourse to them to put it right, as this seems like an obvious error.

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By Tosie
18th Jun 2008 10:50

C . T problem
If the tax has been shown as an expense has it been added back in the C.T. computation ? If not you will have to revise this.
good luck

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By User deleted
18th Jun 2008 07:40

Post two years this year.
I would post both the tax payment for last year and the tax provision for the current year to the P & L taxation code.

I would then provide a note in the accounts showing the split between the current year charge (provision) and a prior year adjustment (tax payment)

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By A* accounting
18th Jun 2008 00:06

Ltd Company
Sorry should have put that in, yes it is a ltd company.

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By Tosie
17th Jun 2008 19:33

type of business
Is this a ltd co ?if not tax is not shown in the accounts it is a personal expense and is part of drawings

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