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Hi,
I am reading technical articles on ACCA website for Corporation tax,
Year ending is 31-3-2023 and tax year ending is the same, right?
I am confused in terms of interest, they have included 24600+12300-20500, I understand – 24600 paid on 1.1.23 which is within 4 month period, 12300 paid on 31-3-2023 which is on the period ending and then 20500 accrued on 1-12-22 which is start of 4 month period ending but they have excluded that, I don’t understand why?Thanks
Vavneetindividuals use the tax year i.e. 6th April to 5th April and Ltd Companies use the financial year 1st April to 31st March to reference tax due
The answer in the article is correct and you should review the relevant chapter in the OT manualYes I understand that, but why they have taken 20500 off it does fall into the period of tax year, accrual on 1.12.22 falls into the tax year of 1.4.22 – 31.3. 23. Why have they deducted that?
and they haven’t time apportioned 6months interest of £24600 which was paid on 1st Jan, are we not only taking for 4 months?I have gone through notes and lectures but still don’t get. I will really appreciate, if you can help me please.
Thanks
Firstly the accounts you are adjusting are for four months only as the company changed it’s year end.
The adjusted figure is the amounts paid and accrued – 24600 + 12300 less the old accrual of 20500
It has nothing to do with tax years which is where you might be confused.
Companies dont deal with tax years only accounting periods.Hope this helps
And please on a side note,
this is a minor issue, though it might seem huge to you. Please don’t overly worry if you don not understand every small rule/answer.It is important to pass the exam (hoop jumping) and eve if you got this wrong in an exam you will only have lost 1 mark.
Jill
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