Hi there,
I have a question on how to record an HMRC corporation tax refund that I’m hoping you can help me with.
My company generated a loss in the 2020-2021 financial year (1st April 2020 to 31st March 2021). So, when I submitted the corporation tax return in December 2021 I asked for a corporation tax refund from HMRC (i.e. a refund of the tax paid for 2019-2020). They refunded my company £262 on the 3rd February 2022, i.e. in the 2021-2022 financial year.
I am now preparing the 2021-2022 corporate tax return. I tagged the £262 repayment as ‘Tax Refund from HRMC > Corporation Tax’. It then appears in the Balance Sheet as a current liability in account 2320 ‘Corporation Tax’ , reducing net current assets by £262. This doesn’t seem correct to me. So, my questions are:
a) Have I in fact tagged it correctly?
b) If not, how should I tag the refund from HMRC?
Any help appreciated
Regards
Tom