Corporation Tax Liability
- Thread starter numbersrule
- Start date
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provision for corporation tax liability should already been included in the company accounts under FRS102 or FRS105 reporting.
The CT payment should clear the provision otherwise there will be an under/over provision to account for.
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How does the director know the CT liability is incorrect?
Did this director approve and sign the accounts and CT return?
To answer the question - could anyone find the fault. I'd want a bit more information first including what and why the liability is incorrect and the amounts involved.
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- Original Poster
- #6
The Director does not have visibility of any of several years of CT600s. The former Accountant seems to have kept things close to their chest.
The Company made large losses some years ago which have nowhere near been used up by subsequent profits. This is all self evident from the Accounts which are visible and known to the Director. Dividends have been 0.00 for years.
The CT Liability is actually 0.00.
When I said 3 orders of magnitude I meant infinitely x incorrect as tens of k's.
The Company made large losses some years ago which have nowhere near been used up by subsequent profits. This is all self evident from the Accounts which are visible and known to the Director. Dividends have been 0.00 for years.
The CT Liability is actually 0.00.
When I said 3 orders of magnitude I meant infinitely x incorrect as tens of k's.
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- Original Poster
- #9
It seems to me that the Accountancy Sector is overworked and clearly decisions are made about which businesses are prioritised for accurate reporting. Some businesses are deprioritised due to Accountants unmanageable workloads. It is well known that Accountants admit to frequent errors.
I don't think this is about deliberate misreporting.
It looks to me like the large losses were mistakenly posted as profits. Then penalties and interest have been added for a few years.
I don't think this is about deliberate misreporting.
It looks to me like the large losses were mistakenly posted as profits. Then penalties and interest have been added for a few years.
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As an accountant, I think that’s an unfair and very inaccurate characterisation of my profession.
I don’t accept the suggestion that accountants “admit to frequent errors”, or that we are simply overworked and therefore prioritise certain businesses due to unmanageable workloads.
The type of issue being suggested here — such as large losses being recorded as profits — would be a very unusual mistake.
I’d also be interested to know whether a qualified UK accountant was actually involved.
I don’t accept the suggestion that accountants “admit to frequent errors”, or that we are simply overworked and therefore prioritise certain businesses due to unmanageable workloads.
The type of issue being suggested here — such as large losses being recorded as profits — would be a very unusual mistake.
I’d also be interested to know whether a qualified UK accountant was actually involved.
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This is unlikely if the accounts show losses as the accounts will pull through to the tax return.
There are a few things that I can think of that could have happened:
1 accounts profits do not equal taxable profits so it is possible that there isn't the amount of losses that you / your client thinks
2 losses b/fwd could have been omitted
The accountant should have copies of all returns and computations. If they don't supply them you can ask HMRC (but they tend to push back initially in my experience).
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If that is the case why didn’t you spot the error when you signed off the accounts? As a director you are responsible not the accountant.
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