Good morning ,group
Company's year end 30th of Apr 2021.
During 20-21 the company has made a trading loss of £ 30,000.
During the previous financial year ending 30th of Apr 2020 ,the company has made a profit of around the same amount(keep it simple) and paid Corporation Tax.
We intend to claim a tax refund for 19-20 using the 20-21 loss.
I am now preparing the accounts for 20-21 ,the loss year and I have to record the asset (future benefit )which will then be credited into 21-22 -year of receipt.
Some are advising me to just record the receipt and deal with the journal entry when refund is paid in the bank CR CT expese P/L -Dr Bank .
It doesn't feel right to do that as its against the allocation principle: how is this credit P/L tax expense account relevant for 21-22?
I would really appreciate your advice because I keep receiving conflicting information.
Thank you indeed!