Quick one: A company is issued a VAT surcharge. The company then accounts for this as an expense in the PNL and as a liability in the BAL on the date the surcharge was issued. Then, for tax purposes, the surcharge is added back to the profit as it is not tax deductible.
Correct?
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Correct
... except that if the surcharge is not levied until after the year-end for a late return/payment before the year-end, the surcharge should be accrued into the year.
For the sake of clarity....
Hi Euan,
Just come across this post and your answer.
You refer to accruing for the surcharge at the year end if a late return / payment before the year end,
However, if the return is for the quarter ending the same day as the accounts year end then return will be submitted by 1 month after the year end and due for payment approx 10 days after that.
Would you still accrue for this ?
Thanks in advance.