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Jim, please advise category for fixed assets
These are under tangible - office equipment
Jim, thank you for your reply.
You state "The maths in one sense adds up but why is there a difference between my financial acct asset values v corpn tax return values? Have I misunderstood the process?"
The reason why the two values may be different is..
In financial accounts we should NBV of tangible assets after adjusting for accumulated depreciation at rates per accounting policy.. In your case, you are depreciating your office equipment at 20% on reducing balance basis.
In tax accounts, depreciation is added back and you get capital allowance instead. The writing down allowance may or may not be the same as the depreciation rate in the financial accounts. Furthermore, you can claim FYA of 100% and or annual investment allowance (100%) in tax accounts where as you would be using 20% in financial accounts.
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Jim, you have also stated
"I have entered administrative expenses under p&l page including depreciation as my understanding is that depreciation is added back in the computation page and allowance claimed at 20% but can not get that far as error message over the AC132 and 133 not equating to balance sheet assets "
Have you put a cross under tangible assets and office equipment on Statutory Accounts Notes menu.. once you have done that
then input your figures into the Office equipment category of Tangible assets Office equipment .. these will automatically roll into Tangible assets Total page.
I have sent a reply in response to your answer and thought I pressed reply to expert button but I can not see an entry for the reply as the status at the top says 'we're waiting for you'. Was the reply received?
Jim, I received one reply to say Tangible assets are office equipment
Sorry I must have omitted to press reply on second reply. Following up your answer, I have been writing down the value of assets each year using the reduced balance and charging 25% depreciation on that balance in financial accts. Hence year end asset bal will be 25% less e,g, if start bal was £304 deprn is £76 and year end bal in accts is £228.
I mentioned 20% as my understanding is that is the figure that has to be used for corpn tax for writing down allowances re my type of assets.
I still do not see why the CT 600 and fin accts asset values are different. The corpn tax figures seem to be out from balance sheet because i have entered a figure in box Ac128 for cumulative depreciation.
Corporation tax figures may be out of balance sheet, but if you or your accountant claimed FYA for capital allowance that was different from depreciation shown in financial accounts then the written down values would be different. You can check this when you compare -
Box AC133 - Net book value previous year with Box CP92 - Written down value carried forward from your last year CT600 return. Please look at Capital allowances/balancing charges within Computations section of CT600.
Thanks but that still does not account for the difference. for last year 10_11 I was not required to submit a corp tax return as I had been employed not revenue was earned by the Company. In addition, I had a unexpected blood clot at the time of needing to fill in the CT form but the tax office approved that I need not send in a form.
So the last CT600 is for 09/10. The capital allows page entries are
CP54 total £101 as depreciation charge added back
CP78 asset value b/f £405 (from prev fin accts)
CP89 W Down Allow £ 81 (20% as that was my understanding)
CP92 asset value £324 (fin acct bal asset value £304 for the year end - difference of £20)
So if I have to estimate 10/11 corpn tax entries as no return- would those be
CP78 asset value b/f £324 (£304 from prev fin accts)
CP89 W Down Allow £ 65 (20%)
CP92 asset value £259 (fin acct bal asset value £228 for the year end - difference of £31)
If that applied to 11-12 the difference would have been CP78 asset value b/f £259 (£228 from prev fin accts) CP82 Additions £229 (new total 488)CP89 W Down Allow £ 98 (20% of new and c/f asset value)CP92 asset value £390 (fin acct bal asset value £343 for the year end - difference of £47)Is that how I should have calculated CT values?
Jim, thank you for your reply...
You say you did not file a CT600 for 2010-11 for reasons stated. The company was not trading and technically dormant.
If I were you I would input for 2011-12 figures as follows:
CP78 - £324 (balance b/f from 2009-10)
CP83 (AIA) - £229
CP88 - £229
CP89 - £65 (20% of CP78)
CP186 - (229+65) £294
CP92 - £259.
This figure will not agree with NBV per financial accounts because of difference in depreciation rate and WDA.
Thanks hopefully we are getting there but I can not access the computation pages as it will not let me go past an error now appearing on AC128 retained profit which CT 600 shows as £332 compared to fin accts £317. I have tried saving by clicking on the page and the next button but I can not access next pages including computation (stragely enough but probably a coincidence the difference between deprcn and WDA for 10_11 yr was £15.
Any suggestions how to overcome that
Jim, thank you for your reply..
I am confused..."it will not let me go past an error now appearing on AC128 retained profit which CT 600 shows as £332 compared to fin accts £317"
Box AC128 relates to Depreciation opening balance and not retained profit...
Please expand on this.
Sorry I shall have said AC218 which is retained profit
Jim, please advise what you have input in these boxes
Box AC215 should be closing balance end 2009-10.
As you did not trade in 2010-11 I presume both AC215 and AC218 would read the same figure.
I had been using the figures from my fin accts for 2010-11 as the co accts were produced even though no tax return was required. This may be where I have gone wrong as the figures in CT600 were based on the fin accts.
The figures currently in CT600 are given below with notes
PROFIT AND LOSS Box No. This year Box No. Last yearprofit or (loss) for current year after tax ac36 0 ac37 -259dividends for the period ac38 0 ac39 0net balances transferred to reserves ac40 - 207 ac41 -259
STATUTORY ACCOUNTS NOTES Box No. This year Box No. Last yearprofit and loss - opening balance ac184 332 ac215 591**profit for the period ac185 -207 ac216 -259equity dividends paid ac186 0 ac217 0retained profit ac187 125 ac218 332 error msg Box AC215 should be closing balance end 2009-10. £591 was the retained profit in fin acctsAs you did not trade in 2010-11 I presume both AC215 and AC218 would read the same figure. - There were still expenses incurred such as Co hse return,domain name/webhosting renewa, bank acct fee as I do not want to lose those and have to restart again when jhopefully back earning revenue for this company.
"As you did not trade in 2010-11 I presume both AC215 and AC218 would read the same figure. - There were still expenses incurred such as Co hse return,domain name/webhosting renewa, bank acct fee as I do not want to lose those and have to restart again when jhopefully back earning revenue for this company."
You have sent some numbers for this year and last year. For last year your expenses were £259 giving you a loss of £259 in Box AC27, AC33, AC37 and AC41.
This loss has reduced your retained profit to £332 at the end of year 2010-11.
In this year there is a further loss of £207 reducing your retained earnings to £125 at the end of 2011-12.
For me to better understand your figures and move forward, please complete missing boxes here
PROFIT AND LOSS
cost of sales
other operatiing income
operating profit or (loss)
profit or (loss) on ordinary activities before taxation
tax on profit or loss on ordinary activities
profit or (loss) for the financial year
dividends for the period
net balance for the financial period transferred to reserves
profit or (loss) for current year after tax
net balances transferred to reserves
STATUTORY ACCOUNTS NOTES
profit and loss - opening balance
profit for the period
equity dividends paid
I realise that you are reviewing the response and will have other demands on your time. Just to say I need to step back and take a break as I am getting befuddled now with 09-10 figures as the carry forward for CT 600 in 11-12 due to reasons given. So if ok with you I shall return hopefully fresher to the figures on Tuesday as meanwhile I will look over what we have said to date to see if any light dawns on me
Please come back when you are ready..
Enjoy your weekend.
I have reviewed where we got to and also the figures and my understanding. A key question that I need to get straight is the values to be entered under asset value on the balance sheet AC 44 and AC 45
Are those the fixed asset values at year end from the financial accts or from the c/f figure from the Corpn tax values i.e when the WDA rate has been taken off rather than depreciation as in the accounts.
As an example to illustrate.
Example A - the asset values for 2011-12 and 2010-11 are respectively £343 and £228 (after depreciation at 25% on reducing balance including additions in 2011-12.
Example B - In contrast if the corpn tax asset values have to be entered those would be £397 and £262. I have used a hybrid percentage of 19.16% to take account of the WDA rate dropping to 18% from April 12 and 20% for 2010-11
Which values should be entered A or B?
I have also discovered an error in the accounts (my error). Last year when I misunderstood drprcn v WDA treatment, my loss was - £259 but I added back depreciation at 25% (£76) and deducted the WDA at 20% (£61) in my P&L to give losses of -£274 - a difference of £15
I then deducted the loss of £274 from my retain profit b/f so the balance was £317 (591- 274) and carried forward £317 to my balance sheet for11-12. That should have been £332 as I now believe that I should not have made the adjustment of £15 by adding back depreciation and deducting WDA in my P&L to arrive at my profit figure.
I hope this adds some more light.
The values in Boxes AC44 and AC45 are values from Financial accounts- example A.
Hello, you will be relieved to know that I have now cleared the error messages and have been able to complete the whole return and submit it but not without a battle over £1 difference between two parts of the form but managed to resolve at the end.
Thanks for your pointers which helped me to realise where I had misunderstood the process/principles
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I am pelased you manage to address all error messages.
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If you are happy and there are no more issues I will appreciate if you would kindly rate the service I provided to ensure I get paid for it.
Jim, thank you for accepting my answer.
I will appreciate if you would let me know where I could have given you a better service. I identified your errors and gave you pointers.
You have considered my service to be just OK.
It was really when I asked several questions in one reply often only one was answered which meant that I had to either restate it again. The lesson perhaps for me is to keep the replies to one question.
Hello, I am not sure whether I have understood your last message in which you posed two questions
ii) have I remembered to rate the answer which I did as we corresponded on the rating and
i) whether I have more questions to ask. Does this mean that a) I can ask more questions which will be covered by the original fee I paid afor the original question or b) further questions can be asked for which a quote of the cost will be given.