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Deferred tax adjustment in accounts

Include or remove?

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Hi all

I have a Ltd co that produced accounts (including a very small adjustment for deferred tax) for the year to 31 March 2019.

I subsequently need to make an NBV amendment to those accounts, which I am doing now in the hope of filing amended accounts.

In the time between filing those accounts and the current date I have made the decision to close tge ltd co. There is no corporation tax payable in subsequent years.

my question is when amending the accounts to 31 March 2019, being that there is no future tax due can I also remove deferred tax?

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By John Charman
22nd Jun 2020 05:26

Hi there,

Presumably the deferred tax is due to enhanced capital allowances?

If so, then in the last set of accounts the assets should be disposed of at their market value, which if at the net book value would potentially give rise to a corporation tax liability of somewhere near the deferred tax provision (assuming there were no other reasons for it).

I don’t account for too much deferred tax myself these days as the majority of my clients fall under FRS105, and so I use that reporting framework.

Hope this helps.

John

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By johngroganjga
22nd Jun 2020 10:57

If by “NBV amendment” you mean a change to the accounting book values of tangible fixed assets, that will of itself (assuming that capital allowances have been claimed on the assets in question) mean that the calculation of deferred tax will have to be reworked for your tax reconciliation still to balance.

So the figure may change, but if it is still a credit balance the question as to whether to provide for it is as set out in the above response.

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By andrew1211
22nd Jun 2020 10:57

Why are you bothering with filing amended accounts?

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Replying to andrew1211:
ALISK
By atleastisoundknowledgable...
22nd Jun 2020 11:45

Quote:

Why are you bothering with filing amended accounts?

To reduce the asset value to make it easier to answer the liquidator’s question “what happened to all of those assets at the last YE?”

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