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Tax account - UK GAAP |
See Also
Adjustment of profit | Deferred tax - onshore pooling | Deferred tax introduction | Deferred tax not provided | FRS 19 Discounting | Group relief receipts/(payments) | Profit and loss account / Income statement (D schedule) | Tax accounting disclosures - UK GAAP | Tax payments and interest
Select from the following headings:
Background | Developing the schedule | Completing the Schedule | Standard Sub-Schedules | Carry Forward | Related Errors
This schedule supports the calculation and disclosure of corporation tax debtors and creditors, deferred tax assets and liabilities in the period.
Numbers entered in the ?B/f per accounts? and ?C/f per accounts? columns per this schedule will be the numbers that form the tax accounting disclosures per the Tax accounting disclosures sheet.
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 P/L approach
IFRS
To complete the tax accounting sheets under IFRS, you should develop the tax basis balance sheet tax accounting sheets from Develop, Other, Tax account ? balance sheet approach.
Brought forward/Carried forward balances per accounts
The brought forward deferred tax figures from the prior year accounts must be entered manually if deferred tax schedules were not used in the prior period. The software will carry the balances forward automatically in subsequent periods if the ?C/F per accounts? cells are completed.
If a detailed breakdown of the balances in the prior year accounts is required in the other supporting schedules, the selector flag at the foot of the B/F per accounts column should be changed to Yes. This detailed analysis is optional.
Brought forward per comps/Brought forward per a/cs
The balances shown per the prior year computations will be brought forward automatically and the software compares these values with the b/f accounts figure.
Prior year P/L charge/(credit)
Any differences between the brought forward figure per the accounts, the cushion to be retained and the brought forward figure per the computations are treated as prior year adjustments.
Prior year cushion to be retained
Where the brought forward figures in the accounts contain a cushion, the user has an option to retain all or part of the cushion. This column is hidden by default, but can be reviewed by changing the selector Display simplified layout on tax accounting sheets on the Tax account options and rates sheet to No. Any differences between the brought forward figure per the accounts, the cushion to be retained and the brought forward figure per the computations are treated as prior year adjustments.
Current year P/L charge/(credit)
The current year movement will be calculated automatically.
Carry forward per comps/Carry forward per accounts
The software will calculate the ?C/F per computations? figure as a best estimate of the carry forward balance for the accounts. This number may need to be adjusted for items/scenarios that have not been detailed in the computations, therefore the C/F per accounts? column must be entered manually by the user. Quite often the amount entered in the ?C/F per accounts? column will replicate that as per the ?C/F per comps? column.
The ?C/F per accounts? column must be populated before the figures will flow through to the Tax accounting disclosures sheet. If this column is not populated there will also be a reconciling number in the ?Difference in provision per accounts? row. Once the numbers are entered, this should clear.
Payments(Receipts) for group relief/ACT surrenders
Payments made or received for group relief and other subvention payments must be entered on the appropriately named rows at the bottom of the ?Current tax? section of this schedule.
The amounts entered in these rows should reconcile to the amounts as per the Subvention payments schedule and vice versa. Once amounts are entered in these rows, errors will appear on Subvention payments schedule until the numbers are reconciled.
Note: To ensure that the layout of this schedule is clear, display formulae are employed to suppress many of the 'zero' amounts.
Amounts charged/(credited) to equity
To ensure that the correct equity figures flow to the F schedules, the STRGL or SORIE should always be completed for equity items in the tax computation.
The tax figure in relation to amounts charged/(credited) to equity should be entered in the column entitled Charged/(credited) to reserves. A warning will appear at the bottom of that column prompting for numbers to be entered into the column.
Tax Rates
The tax rate of the F schedules will automatically revert to the prevailing tax rate for the tax computation for that financial year, as this is usually a good approximation of the rate at which the deferred tax balance will reverse.
The tax rate can be overridden where the deferred tax opening balance or closing balance should be disclosed at a tax rate different to that of the file. The 'Movement' cell will override the rate used in the current tax reconciliation.
If the carried forward override cells were used in the prior period, then a selector will appear asking whether you wish to ?Use brought forward overrides?? If the carry forward rates for the prior period (i.e. the brought forward rates for this period) are no longer applicable, these can be overridden using the cells provided.
The data entry cells to do this can be found at the bottom left hand side of this schedule or on the Tax account options and rates sheet.
Deferred tax not provided
Amounts in relation to deferred tax not provided should be entered on the Deferred tax not provided schedule. These amounts will then flow through to this schedule.
For pre 2009 files, deferred tax not provided b/f figures should be entered in the data entry cell to the bottom left of this schedule. Deferred tax not recognised in respect of deferred tax assets should be entered as a positive amount and vice versa for amounts provided for deferred tax liabilities.
For 2009 files onwards, any deferred tax not provided amounts brought forward should be entered into ?B/f per accounts column? on the ?Less deferred tax not provided? row.
Restriction of Losses
This schedule will automatically restrict the total amount of deferred tax not recognised in respect of losses to the total deferred tax liabilities in the computation. To see the whole deferred tax balance in relation to the losses, change the selector on the bottom left of this schedule called ?Apply restriction of losses? to No.
Tax payments/receipts
Tax payments or receipts entered on the Tax payments and interest schedule will automatically flow through to this schedule. Tax payments made in the accounting period will automatically flow to the receipts/(payments) cell in the current tax section at the top of the schedule.
If tax payments/receipts were made after the accounting period end then these amounts will not affect the current tax creditor/debtor in the period. The numbers will instead flow through to the cell entitled ?Total tax (payments) c/f for payment in future periods? and will be carried forward to the next period on roll forward.
These tax payments/receipts made after the prior accounting period end will roll forward automatically into the cell ?Tax (paymts) b/f from prior periods?. The software automatically assumes that any tax payments brought forward will be paid in that next accounting period. As such, these amounts will then appear in the current tax section at the top of this schedule.
For new 2008 files onwards, this schedule has been enhanced to deal with situations where a file has tax payments/receipts brought forward from prior periods which are not paid in that period, but instead need to be carried forward again.
If the payments/receipts are not to be paid in this accounting period then the amount of tax payments to be carried forward (in respect of b/f amounts) should be entered either in the cell entitled ?Reallocate tax (paymts) b/f to future periods? or in the cell ?Reallocate receipts b.f to future periods?. The payments will then be added to the ?Total tax (paymts) c/f for payment in future periods? cell or the ?Total tax receipts c/f for receipt in future periods? cell.
If amounts brought forward are paid in this accounting period, they will be included in the current tax section of this schedule on the row for the prior year. If the amount relates to a different accounting period then amounts can be reallocated to the correct accounting period by manually typing them in against the correct year.
The following sheets can be developed from this sheet:
On carry forward, the set of F schedules are automatically developed in the subsequent computation
Error |
How to solve it |
| £ of equity items should be allocated to this column | This error suggests that somewhere in the computation an amount has been charged to equity as opposed to P/L (for instance an amount may have been allocated to current tax in the STRGL/SORIE, or a selector may have been changed on the STTD schedule (F6) from I/S to Equity). To clear the error the amount charged/credited to equity should be entered in the ?Charged/(credited) to reserves column? in the row of the item to which it relates. The STRGL and SORIE should be developed for all computations with amounts charged/(credited) to equity. |
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