Disclosure requirement for Corp tax refund

Disclosure requirement for Corp tax refund

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We expecting a corporation tax refund from 2010. I’m now preparing 2011 statutory account should I disclose the tax refund in debtors (other debtors) or reduce the provision for corp tax in liabilities by the refund amount.

Do I need a separate note to disclose this refund or not ?.

What I have done so far is include the refund in other debtors. i.e. debt other debtors and credit corp tax in P&L.

I’m thinking of changing it to DR: provision for Corp tax in Liabilities and CR: Corp tax in P&L

I will be happy if anyone could advise of the correct way to do this and if further disclosure is required.

Thanks,

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Euan's picture
By Euan MacLennan
19th Jun 2012 13:34

What is going on?

You appear to have a profit in 2011 on which tax is due, so the 2010 refund cannot arise from 2011 losses now being carried back.  I am puzzled that you need to make an entry in 2011 for a tax refund for 2010, presumably due to losses in 2010 carried back to 2009 or earlier, which was not accounted for in 2010, claimed on the 2010 CT return or paid within 12 months.

Or are you saying that there is no tax liability for 2011 due to losses in 2011, which you are carrying back, and you are thinking of showing the tax refund as a negative creditor?

For what it is worth, we always show any tax recoverable as a debtor and any liability as a creditor.  I vaguely recall some rule that you should not net things off, but I think it makes the situation clearer anyhow.

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Replying to Pembroke:
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By User deleted
19th Jun 2012 14:32

Hmmmm

Euan MacLennan wrote:

You appear to have a profit in 2011 on which tax is due, so the 2010 refund cannot arise from 2011 losses now being carried back. 

I can think of at least once such possibility.

And there are plenty of other reasons for a 2010 refund  other than 2010 losses in the company - amendment to return, group relief now being claimed etc etc.

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