Hello
I have a problem that many of us will be having I am sure, that when I call the 'local' tax office I go through to a call centre and I have to wait a week for my call to be returned....and when it is returned they never seem to be able to answer my question....so here goes!
I have only done 2 CT600s before so apologies if this is an easy question:
My new client, incorrectly posted £7k to income in their accounts last year, when it actually belonged to their associated company, and it was a loan not income anyway.
They have therefore paid £1.5k too much tax in the prior year
This year they have a profits chargeable of £4.5k around £900 tax to pay.
1. How does the company get the £1.5k back from the prior year? Is it all done on the current tax comp which is due to be paid end of Dec?
2. Would I put the value in trading losses b/fwd, claimed against profits (BOX 4)?...although not a trading loss as such, just an adjustment.
3. Do I need to notify HMRC in writing.
4. How do I reflect the charge in the financial accounts? Re state prior year charge and keep this years charge the same or show as a refund due?
Thanks in advance
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Some answers
If the tax is payable by the end of Dec - presumably 1 Jan 2013 - I assume that your current tax computation is for the year ended 31 March 2012. If so:
You file an amended CT600 for the prior year ended 31 March 2011. It does not appear on the CT600 for the year ended 31 March 2012.n/a.Not necessarily, but it might be advisable to write to explain the circumstances.It isn't just a case of sorting out the tax charge - the accounts to 31 March 2011 overstated income and hence, profit before tax by £7k, which seems to be very material to the company. I would amend the accounts in order to file them online with the amended CT600. You will also need to file the (abbreviated) amended accounts at Companies House.
Thanks Euan. The PYA is all sorted...apart from amending the prior year tax charge, which i assume i will do if I am filing an amendment to CT600 for last year. I guess they will send a refund for 2010/2011. I just file as normal for 2011/2012. Sounds quite straightforward although the reality may not be!
Just thinking about the companies house filing. The current year accounts have a prior year adjustment shown in STRGL and a note of the effect of PYA. I dont need to re file the prior years accounts re stated to reflect the error do I? Surely the current year accounts deal with the amendment? Hope so anyway!!
Many Thanks