Hi, we were due a refund from HMRC in respect of Corporation tax so posted the following journal in anticipation:
DR CL/Corporation tax
R P&L/Corporation tax charge
We have now received the refund plus interest. Do i post the total amount incl ineterest to clear CL/Corporation tax or do i split it? If so, which code shall i use for interest? should this be a BS or P&L account?
Thank you
Related resources
Replies (9)
Please login or register to join the discussion.
If so, which code shall i use for interest? should this be a BS or P&L account?/p>
Definitely P&L unless you believe the interest has been paid in error and will need to be repaid.
Could you provide a list of "code" options so we can advise the most appropriate?
i was thinking to code it to Other income/ Interest received. Thank you
That certainly sounds right.
Thinking it through might help you - if you post the whole sum to the balance sheet account you're going to be left with a small Cr balance (assuming no other entries) - what would you you do with that balance?
I'm a little bit surprised that you're posting the credit to Corporation Tax charge.
Is there not a Corporation Tax debtor on your balance sheet in your most recent accounts ?
