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HM Accountax Ltd
HM Accountax Ltd, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 459
Experience:  I am an accountancy professional with more than10 years hand on experience in audit, accountancy and tax affairs.
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I need help accounting for a Corporation Tax refund. In FY18

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I need help accounting for a Corporation Tax refund. In FY18 the company made a profit and CT was calculated and paid accordingly. In FY19 it made a loss which I opted to carry back. In FY20 I received the corresponding (partial) refund from HMRC. How do I account for that receipt? If I post it to Corporation Tax, it shows up as a negative CT amount in FY20 (which isn't right). Surely I don't need to re-file accounts for FY18 and FY19 ...
JA: Which tax year is the refund for?
Customer: FY18
JA: Anything else you want the Accountant to know before I connect you?
Customer: I don't think so...

Hi,

I am an advisor at JA and happy to assist you.

What entry did you posted in FY19? It should have been Dr Corp tax receivable (b/s) Cr Corp tax (P&L).

If you haven't done the above entry then you should just post the payment to Corp tax current year.

You don't need to amend 2018 or 2019 accounts.

Regards

HMAT

Customer: replied 18 days ago.
Thanks.
I posted no entry in FY19. The company made a loss so there was no CT liability to account for. In FY20, I posted the receipt from HMRC to Corporation tax - so that's now showing on my P&L as a negative CT expense.

That's absolutely fine.

There should have been negative last year but you didn't posted the journal last year so its negative this year.

Regards

HMAT

HM Accountax Ltd and 2 other Tax Specialists are ready to help you
Customer: replied 18 days ago.
OK. Thanks for your help. All done now.

Good stuff.

If you have any further queries then please feel free to contact me.

Regards

HMAT