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Disallowance of amortisation goodwill

C T computation on (commercial) software seems to have disallowed amortisation twice

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Company was formed six years ago to acquire the client's medicolegal practice. I valued the goodwill at a defencible and very realistc £10k. Obviously, writing off at £1k pa.

Year to 31 March 2021 shows a loss. I have carried back.

I disallowed the amortisation in tax comp. On completing TB for the accounts in the softwate I showed depreciation and amortisation under the appropriate headings. In the compution the software has shown the amortisation as that AND as "amortistion of goodwill" thus disallowing it twice and so reducing the loss by an additional £1k.

I assue that I should show the total of depreciation and amortisation as a composit figure under the former heading.

I think I need to check with the software house as to what, if anything, I have done wrong on their kit.

Thanks in advance for any help and thoughts.

Replies (7)

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By Duggimon
23rd Jul 2021 15:16

Did you manually enter a figure to disallow the amortisation? It sounds like you may have entered in the amortisation and the software has also entered the amortisation, doubling up the add back.

If that's the case, try just deleting your entry.

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By GamekeeperTurnedPoacher
23rd Jul 2021 15:46

Thanks,
I entered the figure once on the TB. Done so on other accounts with amortisation and no problems but those were profits not losses.

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Replying to GamekeeperTurnedPoacher:
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By GamekeeperTurnedPoacher
26th Jul 2021 13:25

On checking the other client's CT comp which is a profit I see the same problem. I must have made an error somewhere. Email to software house for help!

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RLI
By lionofludesch
23rd Jul 2021 20:56

What software are you using?

Although, I agree that you've somehow included the amortisation twice.

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By GamekeeperTurnedPoacher
23rd Jul 2021 21:03

Thanks!
Taxfiler.

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Replying to GamekeeperTurnedPoacher:
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By lionofludesch
23rd Jul 2021 22:56

Well, personally I'd always draft the tax comp on a fag packet and key the numbers in myself rather than trust any software to do the job for me.

The good news is that you can overwrite Taxfiler's guess.

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Replying to lionofludesch:
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By GamekeeperTurnedPoacher
26th Jul 2021 13:34

Thanks again!
I ALWAYS do my own tax comp. To my eternal shame, what I didn't do was check the adjusted taxable figure and the CT liability generated by the software. If I had done I would have been asking where I had made my error. I have done so now. A lesson well learned!
Email to software house for help!

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