Is a Corporation Tax Refund Income?

[GinaCziffra]

Tell them it's not and find another accountant.

Unfortunately for me - the accounts have been submitted already, and I have left them now - as I intend to close the company (I was unhappy at what they were charging to do this for me).

I wished I had seen this earlier.

SJD Accountancy are supposed to be contracting specialists in their field - obviously they didn't seem to give a damn about the accounts.

Is there anything I can do? Given that my intention is to close the company down after I have submitted p11ds in April

[SueEllen]

I needed to know the same thing, so I asked my accountant about this when they did my year end accounts in February.

They said it was taxable, and classed it as income (the whole amount not just the interest).

Tell them it's not and find another accountant.

[GinaCziffra]

Hi All,

i am in a position where i might get a CT refund from previous years (due to capital allowances and the AIA).

If this does happen - is the refund income?

if it is do I pay tax on the refund?

I currently post my CT provision into my capital accounts..... so assume if CT is income i need to post it elsewhere and it is not just a cr to my provision account?

Thanks oh knowledgable ones.

I needed to know the same thing, so I asked my accountant about this when they did my year end accounts in February.

They said it was taxable, and classed it as income (the whole amount not just the interest).

[prozak]

If you were around here I could come and pay you for advice! haha.

Sort of right.

I made a profit in 2013 and paid tax.
2014 I bought an asset.
2014 I also made a profit.

I haven't (yet, its changeable) totally closed off last year or made any CT provisions in my accounts.....

Asset is big enough to write off both profits.

Thanks.

[ContrataxLtd]

Thanks all for the answers.

Curious as to how it is actually dealt with then for previous years....

I think. I have just realised something else. I have not made any provision for CT for the last year (year ended in december) in the books as yet as i knew this asset was coming... However, I think for good practice it is required and then can be reversed?

I know, ask my accountant!

The problem with accountants is that most want a big chunk of cash for doing the whole lot whereas all i require is small bits of advice here and there.

Cheers.

Hi Prozak

If I've read things correctly, you've made a profit in the accounts to December 2014 but will be purchasing some equipment which qualifies for AIA this year and thus will be able to carry back the tax loss to December 2014 and reclaim some corporation tax?

This being the case, you should have shown a liability for the estimated corporation tax in the December 2014 accounts and you would then show a corporation tax asset in the December 2015 accounts based on the estimated refund you would receive. If you've not shown the December 2014 liability then in practice you will have to show the difference between what was due and the refund in the December 2015 accounts to ensure your profit and loss account is correct going forward.

I've made a few assumptions with this but hopefully it gives you an overview of what needs doing. It might also be worth changing your year end to accelerate the refund of corporation tax but this would be something to look at in detail before pressing ahead with it.

Do I get a big chunk of cash now?

Hope this helps

Martin
Contratax Ltd

[prozak]

Thanks all for the answers.

Curious as to how it is actually dealt with then for previous years....

I think. I have just realised something else. I have not made any provision for CT for the last year (year ended in december) in the books as yet as i knew this asset was coming... However, I think for good practice it is required and then can be reversed?

I know, ask my accountant!

The problem with accountants is that most want a big chunk of cash for doing the whole lot whereas all i require is small bits of advice here and there.

Cheers.

[jamesbrown]

No, but interest on CT is treated as income.

[Andrew@Wisteria]

No it's not. Same as the tax bill not being a tax deductible expense.

[Scruff]

No, its not taxable. Its added back "below the line", and your Provision for Tax will need to be adjusted by the difference.

Let your Accountant deal with it.

[prozak]

Hi All,

i am in a position where i might get a CT refund from previous years (due to capital allowances and the AIA).

If this does happen - is the refund income?

if it is do I pay tax on the refund?

I currently post my CT provision into my capital accounts..... so assume if CT is income i need to post it elsewhere and it is not just a cr to my provision account?

Thanks oh knowledgable ones.