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Which Corporation Tax Amount to show in accounts

Which Corporation Tax Amount to show in accounts

Hi All

A ltd company made a loss of £1,000 last year.  The Corp Tax due was therefore nil.  

This year the company made a profit of £5,000.  In the accounts, the corp tax was £1,000.

All this is fine.

But when doing the Corp Tax Return, the £1,000 loss is bought forward against this years profit and Corp Tax now becomes £800.

In the companies accounts, because the true liability is £800 due to the utilisation of relief on previous years loss, should the accounts have Corp Tax as £800 in the P&L and same in the Corp Tax line of the balance sheet?

Thanks for responses.


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By mrme89
22nd Mar 2018 20:24

If you showed it as £1000, would the balance sheet accurately reflect the liability to HMRC?

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to mrme89
23rd Mar 2018 10:25

That is a very logical way of putting it... sometimes (especially late at night) can't see the woods for the trees.


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22nd Mar 2018 20:41

How much is owed? £800 or £1k?

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By Ruddles
22nd Mar 2018 20:50

Balance sheet will be £800 because that is what is due.

The P&L entry could be either £800 or £1000 depending on what was done last year. You might have recognised a deferred tax asset of £200 with corresponding credit to the P&L. Current P&L charge would be £1000.

More likely scenario is that tax was ignored last year so current P&L charge is £800.

Either way, then, total charge to P&L over the 2 years is £800.

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By jcace
22nd Mar 2018 20:56

If you didn't provide for potential tax on the loss last year then this year's charge will be £800

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