Nominal Code for Corporation tax debtor

[syed]

Hi,

I am wondering if anyone knows what is the nominal code for corporation tax debtor. So just to explain my question, i have trading loss for current year. So as per my double entry it should be dr Corporation tax debtor and cr corporation tax P&L. So anyone there knows the balance sheet nominal code for this entry??

Thanks

[QFSteve]

Hello @syed

In QuickFile, when you tag a transaction as a corporation tax payment, the balance sheet code affected is 2320.

[cbstephensaca]

I assume you are carrying back the loss and so creating a debtor from a previous year? You can either set up a new nominal code in the 1000s range (current assets), or you could just use the usual 2320 corporation tax liability account, and let your accountant move it to debtors at year-end.

[syed]

Hi,

Thanks for your reply. I am not carrying back the loss. It’s for the current year of which I’m going to submit the accounts.

[cbstephensaca]

So you are carrying it forward then? In which case there is no tax so no debtor.

[syed]

No I am creating a debtor in this year. When I will submit my accounts with loss in the current year, I expect to get a tax refund. At that time the double entry would be dr bank cr corporation tax debtor in balance sheet. Do you think this is not the correct treatment?

Thanks

[cbstephensaca]

You can only get a tax refund if you carry it back to a previous year, to offset against profits of that year, and generate a refund of tax you have already paid. If you don’t carry it back, then your other option is to carry it forward. This is the default position on the tax return. By carrying it forward, it’s available to reduce profits (and therefore tax) in future years. You can’t get a refund just because you make a loss, that just means you have no tax to pay this year.

[syed]

Hi Thanks for that. Obviously i have forgotten everything over past 10 years. You are absolutely right.
Thanks once again. stay in touch.

Kind Regards
Syed