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Forgot to accrue for CT

How to retrospectively treat prior year CT payment that wasn't accrued

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I know, it shouldn't have happened, but it did. We did not accrue for last year's CT and have subsequently filed our accounts. Having now paid that CT in the current year, where does it get posted? If I put it to prior year adjustments, it will reduce this year's CT accordingly. Do I simply make sure that I adjust the profit reported on CT600 for the current year by the amount of last year's CT but leave that amount in PPA for the filed accounts?

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18th Apr 2019 15:40

Just a prior year adjustment, nothing too complicated. Put the tax creditor in your b/fwds and reduce retained earnings accordingly.

The tax payment this year is then posted against the creditor as usual.

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to Duggimon
18th Apr 2019 15:43

I disagree unless the adjustment is material in itself, which as presumably 19% of last year’s profit it is not likely to be.

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By jcace
18th Apr 2019 15:40

The company's tax should be based on the net profit before tax, so whether you treat as a PYA or simply show in the the current year, it should not affect the tax payable this year.

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18th Apr 2019 15:40

You post it to your corporation tax account. Where else were you thinking of posting it?

When your accounts for this year come to be prepared, it’s just part of this year’s tax charge, but probably identified as an adjustment in respect of previous periods.

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to johngroganjga
18th Apr 2019 16:06

TaxCalc has a P&L nominal called something like ‘Prior Year Tax Adjustment’.

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to atleastisoundknowledgable...
18th Apr 2019 16:11

Yes I’m sure that’s where you would put it.

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18th Apr 2019 16:16

Quote : OP

" If I put it to prior year adjustments, it will reduce this year's CT accordingly."

Can you explain your thinking behind this ?

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to lionofludesch
18th Apr 2019 17:17

Certainly, sir. I'm out of my depth.

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By Matrix
18th Apr 2019 21:04

You don’t adjust the CT600 given this starts with profit before tax. I would pass this onto someone who knows what they are doing.

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to Matrix
18th Apr 2019 22:20

Wait - the guy may have been starting with profit after tax.

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By Waves
19th Apr 2019 09:28

To be honest Alan, you should let someone who knows what they’re doing prepare the Company’s accounts and Tax Returns.

The published accounts (Company No. 05819354 for anyone who’s interested) aren’t exactly great.

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to Waves
19th Apr 2019 09:37

Bit light on accounting policies.

And depreciation.

And notes in general.

I would have thought that a million+ in provisions would have merited some sort of comment.

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to Waves
19th Apr 2019 10:27

I'd bet my house that these accounts are wrong. I would have a little bet that they are seriously wrong, too.

Pretty much the only thing I would deduce with confidence is that the company bought a decent laptop in the year.

An enquiry waiting to happen.

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to Waves
19th Apr 2019 16:21

The comparatives in the 2018 accounts bear little resemblance to the filed 2017 set too

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to Waves
24th Apr 2019 15:48

I thought everything Midas touched turned to gold?

OP - best have a word because he's turned your accounts to [***].

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By marks
20th Apr 2019 02:10

With over half a mill in the bank surely you can pay for a qualified accountant to deal with the accounts.

In fact with with over half a mill in the bank account you must be good at running the business. Outsource everything else to an expert leaving you to do what you are good at and free up your time to do what you enjoy doing or spend it with your loved ones. Would outsource all the following

1. Sales
2. Marketing
3. Finance (including accounts, bookkeeping, VAT, payroll, CT returns, personal tax, business planning etc)
4. HR
5. IT
6. Admin

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20th Apr 2019 08:50

I’d love to know what the provisions are.

Almost all of the net assets for the last 10 years.

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By Mintman
to atleastisoundknowledgable...
24th Apr 2019 10:28

I think they run educational tours all over the world and customers pay up front or in installments so the provisions for liabilities, I would imagine, are the cost of the tours which are yet to be booked ie flights and accommodation.

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24th Apr 2019 10:28

Seriously ? I thought this was a platform for accountants!

What are you doing?? Hire an accountant.

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to TalkSense
24th Apr 2019 10:43

Why does he need an accountant? According to HMRC, even MTD can be done at just the touch of a button!

(In case Mr Rooney is reading this and doesn't spot sarcasm, you need an accountant. Urgently!)

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24th Apr 2019 10:43

My guess is that the cash has originated from deposits and not from profits. Maybe the provisions relate to deferred revenue?
(And yes, find a competent accountant.)

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By Ammie
24th Apr 2019 10:47

Just checked the date. Yep, not 1st April!

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By DJKL
24th Apr 2019 11:06

Given ATOL and ABTOT membership am somewhat surprised an accountant is not already involved in the process.

It is years since I dealt with ATOL/ABTA so am very out of date re bonding processes, but do accounts submitted to ABTOT etc not need any form of accountant's certification?

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By arooney
24th Apr 2019 15:02

Thanks for all your comments. My error was thinking that I would post the CT cost above NPBT. As has been pointed out, it goes below, so no problem.

As to the other comments, some nasty and unwarranted, some simply due to ignorance, I answer as follows:

As long as t/o is below 6.5m an audit or an accountant to prepare books is not a legal requirement (you might argue the practical need).
You can assume what you like about an abbreviated B/S, but without the P&L you'll never be sure what lies behind it. Our abbreviated B/S follows the HMRC format. A liability is something that your business may have to repay. Why should we not be liable to repay over £1m should things go awry in the future?
As for posting our company number on this forum, that's simply childish - so you know who to access accounts from Companies House and you can access our accounts because I had the balls to post this question with my name and company whereas you, Mr Waves, are a coward hiding behind a pseudonym.
Capitalise or not to capitalise? That's a business decision. Interestingly we have changed our view on that this year.
Andy Partridge - you would do better spending time making plans for Nigel and have the balls to use your own photo.
DJLK/Brend - you probably know what you are doing.

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to arooney
24th Apr 2019 15:11

Quote:

Thanks for all your comments. My error was thinking that I would post the CT cost above NPBT. As has been pointed out, it goes below, so no problem.

As to the other comments, some nasty and unwarranted, some simply due to ignorance, I answer as follows:

As long as t/o is below 6.5m an audit or an accountant to prepare books is not a legal requirement (you might argue the practical need).
You can assume what you like about an abbreviated B/S, but without the P&L you'll never be sure what lies behind it. Our abbreviated B/S follows the HMRC format. A liability is something that your business may have to repay. Why should we not be liable to repay over £1m should things go awry in the future?
As for posting our company number on this forum, that's simply childish - so you know who to access accounts from Companies House and you can access our accounts because I had the balls to post this question with my name and company whereas you, Mr Waves, are a coward hiding behind a pseudonym.
Capitalise or not to capitalise? That's a business decision. Interestingly we have changed our view on that this year.
Andy Partridge - you would do better spending time making plans for Nigel and have the balls to use your own photo.
DJLK/Brend - you probably know what you are doing.


Take this statement from your accounts:-
These financial statements ..... Financial Reporting Standard 102.
This is incorrect, there are several omissions from your accounts. There are highly likely several errors as well.
You've also displayed that you have little idea about CT. You've also displayed that you have little idea about accounts preparation.
Why not take on board what people are saying rather than try to save a few pounds?
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By arooney
to Wanderer
24th Apr 2019 15:34

Thank you for your thoughtful comments

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to arooney
24th Apr 2019 15:26

Quote:

Thanks for all your comments. My error was thinking that I would post the CT cost above NPBT. As has been pointed out, it goes below, so no problem.

As to the other comments, some nasty and unwarranted, some simply due to ignorance, I answer as follows:

As long as t/o is below 6.5m an audit or an accountant to prepare books is not a legal requirement (you might argue the practical need).
You can assume what you like about an abbreviated B/S, but without the P&L you'll never be sure what lies behind it. Our abbreviated B/S follows the HMRC format. A liability is something that your business may have to repay. Why should we not be liable to repay over £1m should things go awry in the future?
As for posting our company number on this forum, that's simply childish - so you know who to access accounts from Companies House and you can access our accounts because I had the balls to post this question with my name and company whereas you, Mr Waves, are a coward hiding behind a pseudonym.
Capitalise or not to capitalise? That's a business decision. Interestingly we have changed our view on that this year.
Andy Partridge - you would do better spending time making plans for Nigel and have the balls to use your own photo.
DJLK/Brend - you probably know what you are doing.

Yeah - it's not a legal requirement to have an accountant to prepare your books - or, indeed, your accounts. But it is a requirement to prepare your accounts in accordance with the accounting standards and tax law.

Abbreviated Balance Sheet ? No longer permitted. Disappeared two or three years ago, depending on when you adopted (or should've adopted) the new standards.

The expression "tax doesn't have to be taxing" doesn't mean that your tax can be deducted from your profits in calculating the following year's tax.

Know your limits.

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By arooney
to lionofludesch
24th Apr 2019 15:35

Bitter - you? Not earning enough or just small feet?

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to arooney
24th Apr 2019 15:57

Quote:

Bitter - you? Not earning enough or just small feet?

I'm certainly not looking for work from knawall-knawnowts who won't take the advice they've been offered for free.

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to arooney
24th Apr 2019 15:42

I wonder if your company does educational tours up your own backside, only it seems to be a journey you're very familiar with.

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By arooney
to andy.partridge
24th Apr 2019 15:54

Andy is not outspoken
But he likes to speak
And loves to be spoken to
Andy is happy in his work
We're only making plans for Andy

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to arooney
24th Apr 2019 16:18

Too stupid to know you're stupid.

You shouldn't be allowed to be a director of a limited company.

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26th Apr 2019 09:24

If last years CT was £5k and this years £6k

I would just add the two together and show the charge in the P and L as 11k and you will only have a corresponding creditor of £6k.

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to Tom 7000
26th Apr 2019 10:37

Really ?

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03rd May 2019 10:59

Yep the Ct is paid, so HMRC are happy. So we are just looking at the FRS102 S1a rules here on earlier year changes and that's what it suggests

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