More profit more tax | AccountingWEB

More profit more tax

My company spent £1,000 on a pc and £20,000 on our website.  Our other cost was wages and our total costs this year were £52,000. Turnover was £52,100 so we just about made £100 for the year. But our accounts have just been done and they show a profit of about £3,000. That shocked us. The accountant says that some of our costs have been capitalized so they are in the balance sheet and only some of the cost is really being counted against our profit. The corporation tax due on the alleged profit is more than the profit we really made! How can this be right?

 

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ask your accountant

Mouse007 |
Mouse007's picture

Ask your accountant again

jpcentral |

Agree with John

BKD |

It can be confusing...

paulwakefield1 |

"Wages" as an expense for tax purposes

DMGbus |
DMGbus's picture

Good point

wilcoskip |

Company makes profit shock !

zarathustra |
zarathustra's picture

Thank you for the answers. In

PeterLev |

Clients are only pleased with a profit ...

Steve Holloway |
Steve Holloway's picture

Problem

MissAccounting |
MissAccounting's picture

Next year

WhichTyler |

Reality

BKD |

is there a lack of trust?

ShirleyM |
ShirleyM's picture

I can't argue with what is or

PeterLev |

So first answer received was correct

Penfold |
Penfold's picture

Small task?

ShirleyM |
ShirleyM's picture

twitter

Mouse007 |
Mouse007's picture

downside

PeterLev |

No, you couldn't

BKD |

Use of AIA

nautical |

YEP

The Black Knight |

@peter...

justsotax |

Timing

BKD |

Surely it does matter

PeterLev |

Cheap advice = expensive taxes (NIC in this case I have in mind)

DMGbus |
DMGbus's picture

As you can imagine

paulwakefield1 |

Sorry it does matter

The Black Knight |

inflated figures means incorrect figures

PeterLev |

It is

justsotax |

Wind up?

ShirleyM |
ShirleyM's picture

So are you saying

paulwakefield1 |

No

PeterLev |

Yes

PeterLev |

wind up

PeterLev |

Someone needs some basic financial training

BKD |

Believe it or not accounts try to capture reality

TomMcClelland |
TomMcClelland's picture

QED

BKD |

OK - Scenario 2

paulwakefield1 |

Bargain

BananaMan |

Another unlikely scenario

BKD |

Giraffe?

The Black Knight |

This has been discussed

chetan |

Acumen

PeterLev |

Insults?

ShirleyM |
ShirleyM's picture

So if the bank

paulwakefield1 |

Alice through the Looking Glass...

WhichTyler |

Profit

PeterLev |

The answer

PeterLev |

No

PeterLev |

Provisions

BananaMan |