Thoughts on this P&L anyone...

[anonymous-user]

Anyone care to comment on this P&L. I am curious about the tax charge.

[Alpinestars]

No notes to the accounts?

[deggles]

IANAA but presumably something in those expenses disallowed for Corporation Tax purposes. Expensive/heavily depreciating company car?

[Alpinestars]

deggles said:

IANAA but presumably something in those expenses disallowed for Corporation Tax purposes. Expensive/heavily depreciating company car?

Depreciating cars would not in itself cause the tax charge to increase.

[JBM78]

deggles said:

IANAA but presumably something in those expenses disallowed for Corporation Tax purposes. Expensive/heavily depreciating company car?

I agree - likely to be P&L expenses added back to get to the taxable profit e.g. depreciation, entertaining.

If the company has a high depreciation charge but has not bought assets eligible for capital allowances in the year, the depreciation charge would be added back onto the profits to calculate the 'profits chargeable to corporation tax'.

There's a few other possible reasons but this is most likely.

Can we see balance sheet?

[anonymous-user]

Depreciation was my first thought too - is it sufficiently big to broadly make the tax charge look about right?

Balance sheet



Here is the note from the accounts

[Alpinestars]

JPJPJP said:

Depreciation was my first thought too - is it sufficiently big to broadly make the tax charge look about right?

Balance sheet



Here is the note from the accounts

Depreciation of those assets would not change the tax charge from the statutory rate.

Do you have the notes to the accounts?

[anonymous-user]

Yes, I have the notes. There is no reconciliation of the actual tax vs stat tax rate

The only other thing that jumped out to me was in the creditors notes. There is a big number in there as "amounts due to related parties" If that was a Director's loan, that would have an impact wouldn't it?

[Eric Mc]

Is it not a tax refund?

If the company has made losses then losses can be used to generate repayments of Corporation Tax paid in previous years.

[CaptainSlow]

Alpinestars said:

Depreciation of those assets would not change the tax charge from the statutory rate.

Yes they could.

Incidentally, am I incorrect in thinking that accounts are showing a tax credit?

[Alpinestars]

JPJPJP said:

Yes, I have the notes. There is no reconciliation of the actual tax vs stat tax rate

The only other thing that jumped out to me was in the creditors notes. There is a big number in there as "amounts due to related parties" If that was a Director's loan, that would have an impact wouldn't it?

Why?

[anonymous-user]

How about that £43,400 showing as a creditor "tax and social security"

Maybe it is behind on PAYE / VAT?

[JBM78]

Eric Mc said:

Is it not a tax refund?

If the company has made losses then losses can be used to generate repayments of Corporation Tax paid in previous years.

Can you only carry back for 12 months though?

[Eric Mc]

CaptainSlow said:

Alpinestars said:

Depreciation of those assets would not change the tax charge from the statutory rate.

Yes they could.

Incidentally, am I incorrect in thinking that accounts are showing a tax credit?

That was my conclusion too.

Is the company involved in Research and Development of any sort?

[JBM78]

It's not a depreciation add back.

I reckon R&D repayable tax credit.

[Alpinestars]

JBM78 said:

Eric Mc said:

Is it not a tax refund?

If the company has made losses then losses can be used to generate repayments of Corporation Tax paid in previous years.

Can you only carry back for 12 months though?

Yep. So might explain year 1. Not year 2.

[JBM78]

Eric Mc said:

That was my conclusion too.

Is the company involved in Research and Development of any sort?

Eric got in there first! I reckon this is the most likely answer

[Alpinestars]

CaptainSlow said:

Alpinestars said:

Depreciation of those assets would not change the tax charge from the statutory rate.

Yes they could.

Incidentally, am I incorrect in thinking that accounts are showing a tax credit?

Yes it’s a credit. And how so re your first point?

[Alpinestars]

Can’t see any deferred tax....

[Alpinestars]

JPJPJP said:

How about that £43,400 showing as a creditor "tax and social security"

Maybe it is behind on PAYE / VAT?

Wouldn’t go through the tax charge line in the P&L (or shouldn’t!)