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Factors affecting the tax charge

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See Also

Adjustment of profit | Deferred tax introduction | Factors affecting the tax rate | Profit and loss account / Income statement (D schedule) | Tax accounting disclosures


Select from the following headings:

Background | Developing the schedule | Completing the Schedule | Standard Sub-Schedules | Carry Forward | Related Errors


Background

This schedule rationalises the taxable profit/loss on a gross and net basis, shown in the Gross and Represented by: sections of the screen.

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Developing the schedule

This schedule will be developed as part of the F schedules. The F schedules can be developed from either the Adjustment of profit schedule or the Profit and Loss account by selecting Develop, Other, Tax account.

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Completing the schedule

Most of the figures will be picked up automatically from the tax computation, but there are data entry rows marked ?Other? which can be used for unusual items where necessary.

The schedule is divided into two parts, showing adjustments to profit and the tax thereon:
- the upper part of the schedule adjusts the book profit before tax for any permanent items.
- the lower part of the schedule reconciles the taxable categories of the adjusted profit.

The totals of the top and bottom half of the schedule are compared and any differences (greater than the roundings limit) are shown as a check error.

NB the check error normally occurs when items have been included in the computation but not in the tax accounting schedules (i.e. entered on non-standard schedules etc). The check error can normally be cleared by identifying the missing adjustment and entering this into the top part of the schedule.

Most of the tax adjusted numbers are automatically allocated to specific columns to the right hand side of the schedule. The column headings are the captions used on the Tax accounting disclosures schedule. For 2008 files onwards it is possible to reallocate items between columns if necessary. For a few items, the cells have been left as data entry for the user to allocate to a particular column. If there are amounts coming through as ?roundings? in the tax reconciliation on F2, then it maybe because certain items on this schedule have not been reallocated to a particular column.

STRGL/SORIE adjustments
For new 2008 files, adjustments have been made to deal with STRGL and SORIE adjustments. A data entry box has been added to the STRGL/SORIE schedule which should be used to identify any non taxable or non deductible items entered on that schedule. Amounts manually entered in that cell will link through to this schedule.

If the ?Other? row is used (or further data entry rows inserted on to this schedule) then the gross amount should be entered into column B. The net figure will automatically be calculated at the tax rate used on the schedule. The net figure will then also need to be allocated to a particular column to the right of this schedule which will determine how it is disclosed on Tax accounting disclosures.

Roundings limit
The user may enter a roundings limit on this sheet, which is designed to allow for situations where the sheets are prepared to an accuracy of thousands or millions (or perhaps in foreign currency). The default value is 3, which then feeds into the

Roundings limit cell on the Factors affecting the tax rate schedule.

Note: To ensure that the layout of this schedule is clear, display formulae are employed to suppress many of the 'zero' amounts.

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Standard sub-schedules

This schedule has no standard supporting schedules.

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Carry forward

 

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Related errors

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