Corporation tax showing as asset

can someone tell me y payments made to Corporation Tax are still showing as in asset in my balance sheet…

Hi @flauntys

While I’m not an accountant and can’t help with individual accounting queries, I can hopefully point you in the right direction.

There’s a previous post on corporation tax here, which explains how a journal should be created and it’s effects.

From reading your post, I believe the journal should correct your issue. However, as I mentioned, it may be best to run your circumstances past an accountant to be sure.

Hope that helps

Ok thank you. Just seems strange how corporation tax iv paid out is still showing as an asset. Can’t be an asset if iv paid it…

It would only be an asset if HMRC owes you a CT refund.

I suspect you’ve only tagged the CT payments from your bank without doing any year end adjustment journals to balance things off. As part of the year end process you would normally journal the CT liability from your P&L to the balance sheet.

DR: Corporation Tax Charge for the Year (8500)
CR: Corporation Tax (2320)

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Thank you I’ll have a go see if that sorts things out…

Why is so much automated, yet corporation tax requires me to get my head around journaling. Can’t this be automated like everything else I tag on the bank screen?

You can’t automate corporation tax,

There are different rates depending on company size

There are deffered tax depending on certain situations.

There are capital adjustments that reduce tax

And many more reasons as to why quickfile would never know what the correct corporation tax should be.

Personally I don’t see how calculating 19% of your net profit and creating a 2 line journal is really that difficult.

If it’s not that difficult, why would anyone ever pay an accountant … you’re doing us a bit of a disservice there @Paul_Courtier :wink:

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I find it ultimately very confusing. Journaling is not my strong point. Understanding 2 new entries to remove an expense is above my head ATM. I am sure given time I will get my head around it. This is just not my area and I want to focus on the business.

Since tagging everything else assumes that there is a corresponding expense paid and the journaling is all done in the background, I don’t follow why tagging CT is different or at least defaulted to that.

Did you read my response? You’d understand why if you had.

Its perfectly reasonable for a business owner to concentrate on what matters, their business. Which is why accountants exist.

And I’d advise anyone to seek the services of an accountant if the bookkeeping is beyond there remit as the consequences of getting wrong will ultimately cost your business money.

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