Corporation Tax Paid but still showing in P&L

[Darren_Smith]

Hi,

I think I might have done something wrong and I’m having trouble with Corporation Tax.

It is my year end in 2 days, 31.10.2018.

A few weeks after the year end last year, I had the figure for CT liability for the year ended 31.10.2017.

I can’t remember how I entered this figure into QF.

I paid the CT on 24th July 2018 this related to the year ended 31.10.2017.

I run a balance sheet report in QF and CT was showing as a current asset - which I thought was quite strange.

So I searched the forums and found this thread:

Entering and Paying Corporation Tax Liability

We’re a limited company about to pay corporation tax for our first year. How should we treat this payment in quickfile? ‘tax’ isn’t one of the categories in the chart of accounts, so what’s the right way to process this payment (we’ll be paying by bank transfer so it will show on our bank account feed for tagging) Thanks in advance, Mike

I saw that there should be a debit to Tax Expense code 8500 and a credit to CT Liability and so I made the journal.

Now, the CT doesn’t show as a current asset in the balance sheet, but it does show in between profit before tax and profit after tax in the Profit and Loss report.

I suppose I’m wondering if this should show like this, since the profit on which the CT liability was incurred was for the Year Ended 31.10.2017 and not this financial year?

Thanks in advance for any help .

[FaradayKeynes]

You should have a journal in 2017 Ye to record CT and liability as follows
Dr 8500 Corporation Tax Charge for the Year
Cr 2320 Corporation Tax
When you paid in July 2018, you should have tagged bank payment as CT payment and it would have brought balance down on 2320 Corporation Tax

[Darren_Smith]

Hi, Thanks for your reply.

I just tried to change the date of the journal to 29.10.2017, but QF told me that the journal cannot be saved into a locked period.

The journal I have entered is:

Dr 8500 CT Charge for the year £xx
Cr 2320 CT liability £xx

And I’ve dated it 01.11.2017

And I’ve been able to establish that when the CT was paid the double entry was

Dr 2320 CT Liability £xx
Cr 1200 Bank £xx

I don’t seem able to get rid of the balance on 8500 CT charge for the year!

Maybe I should unlock last year and date the journal as 31.10.2017?

[FaradayKeynes]

Yes, you need to unlock period and date initial Ct journal 31.10.2017

[Darren_Smith]

Hi FK,

Thanks for your help.

I did what you said and that has fixed it !

Thanks again!