Corporation tax penalties and fines on the CT600

Corporation tax penalties and fines on the CT600

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Hello,

I am filing the corporation tax return CT600. The particular set of accounts I am doing received a late penalty fine last year for filing late.  Please could some one tell me where the opposite side to the double entry would go.

At the moment I have posted:

CR Bank

DR Corporation Tax

But there was a debit amount for the corporation tax account left outstanding, so I thought I really must journal this somewhere otherwise the corporation tax in that account is showing less than it should do for the year because of the debit of the overpayment which is due for penalties.

Then I thought well surely I should maybe expense the penalty in the profit & loss and then add it back in when I file the CT600. So I journalled the following:

DR Profit & Loss 'expenses'

CR Corporation tax

The only thing when I do this is the profit and loss account is out when I add back in, so it makes the net assets/liabilities and the capital and reserves not balance in my balance sheet (in the CT600). So I took the amount for the penalty out of the retaining profit so it then all balances.

The only thing is when I fill in the profit and loss in the statutory accounts options section, it comes up with an error message so something isn't right.

I really feel as if I should know this but I have racked my brains and quite frankly driving myself mad with it now, please could somebody enlighten me.  I have never dealt with penalties before and this is only my second set of accounts I have filed the CT600 for so I'm not as confident as I would like to be.  I'm probably just being really dim.

Thanks in advance 

Vicki Newman

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Nichola Ross Martin
By Nichola Ross Martin
10th Aug 2015 15:44

Dr Penalty

Cr Bank

write the penalty off to the P & L, it is not tax deductible.

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