HMRC tax refund from previous tax year… do I have to include it and if so where
What kind of tax? Corporation, VAT, PAYE for an employee, or your own self assessment?
Hi Ian
It’s my self assessment from deductions last year
Your self assessment bill or refund is your own personal money, it’s not a business expense when you pay it or business income if it’s a refund. So if you pay your SA bill out of your business bank account you would tag that as drawings - you took money out of the business for personal use - and similarly if a refund comes into your business account that’s the same as you putting personal funds into the business (transfer from drawings).
The amount of profit or loss your business makes is one component that goes into the calculation of how much tax and NI you owe under SA, but the final bill is not a business expense (otherwise it’d compound, if you deducted the cost of paying last year’s tax you’d under count how much you owe this year).
I think I understand lol thank you!
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