Deferred tax

Deferred tax

Didn't find your answer?

Why some accountant does not took the effect of deffered tax due to temporary difference in accounts.

Is there any exemption, if not then no one can check that.

Replies (11)

Please login or register to join the discussion.

By johngroganjga
23rd Nov 2015 20:40

I understand that micro entity accounts do not permit / require (I confess that I am not sure which it is) deferred tax to be provided for, but otherwise it is mandatory to provide for material deferred tax balances in accounts intended to give a true and fair view.

Thanks (0)
By Ruddles
23rd Nov 2015 22:24

Are you sure, Basil?

Where does it say that deferred tax is forbidden in ME accounts?

Thanks (0)
By Ruddles
23rd Nov 2015 23:06

Thanks, Basil
But I still can't see the words that prohibit deferred tax provision. Can you point me to the actual wording.

Thanks (0)
By Ruddles
24th Nov 2015 07:22

A different interpretation
The correct grammatical interpretation of those words is that the items referred to are the minimum required. If the draftsman had intended your meaning then it is extremely poor grammar - what it should have said instead is "the accounts must show only ..." or "the only items that may be shown ..."

Thanks (0)
By johngroganjga
24th Nov 2015 07:37

I agree with Ruddles if the words quoted by Basil are the only relevant words.

You will see from my first post that I had never previously checked this out.

Thanks (0)
avatar
By paulwakefield1
24th Nov 2015 08:26

For micro entities

I think the thing that kills off Deferred tax is not so much the legislation (as pointed out above) but 24.7 in FRS105 which forbids it.

For other enitities, subject to materiality of course and some specialist exceptions, DT is required.

Thanks (0)
By Ruddles
24th Nov 2015 08:35

I agree, Paul

Though the ME Regs effectively did the same. I would not dream of providing for deferred tax where it is not required, but there are some that might,  so, in the interest of providing correct advice, I think it important to understand what the current legislation actually says (and means).

I would refer Basil further to Reg 5 (and elsewhere) where there are references to "minimum accounting items" and in particular to new s393(1A)(c) - which refers to the accounts containing information in addition to those minimum items (requiring the provisions of the relevant accounting standard to be met in full - presumably meaning that if you do want to recognise deferred tax then you need to consider all that FRS19 entails).

 

Thanks (0)
Out of my mind
By runningmate
24th Nov 2015 10:06

Realistically

Does anybody care whether or not deferred tax is provided in the accounts of 99% of UK registered companies?  Anybody apart from navel gazing accountants, that is.

RM

Thanks (2)
By johngroganjga
24th Nov 2015 10:58

Anyone who is interested in whether accounts give a true and fair view of a company's financial position, which we must hope includes all accountants who prepare them, cannot be indifferent to whether a material deferred tax provision is included in them or not.  To state the obvious, they can't give a true fair view both with and without the inclusion of such a provision.

To forestall the next observation, I do not consider myself to be a navel gazer. I consider myself to be an accountant who wants the accounts he prepares to be as helpful and useful as possible to the people he prepares them for, which I hope is the same as all other accountants. 

Thanks (1)
avatar
By syed786
16th Aug 2016 14:37

Thanks for all your comments

Thanks (0)
avatar
By syed786
16th Aug 2016 14:37

Thanks for all your comments

Thanks (0)