closing stock figure

sunny2_2

have just called my accountant & my closing stock figure seems very low at £3,200 if this had been higher would my tax bill have been lower ?

ceeforcat

Yes - your cost of sales would have been higher and your gross profit lower.

Pennywise

ceeforcat wrote: »

Yes - your cost of sales would have been higher and your gross profit lower.

No - the opposite is true. Higher closing stock means lower cost of sales and higher tax. I think cfc mis-read the question.

ceeforcat

Yep - Pennywise - 'must learn to read the question', said my old teacher.

laticsforlife

why is it your accountant telling you the cost of your closing stock - surely you should be telling him the figure?

Didn't you do a physical stock-take? If not how the hell does he know the figure.

It's effectively a timing issue as the closing stock will be the following years opening stock.

adi2402

laticsforlife wrote: »

why is it your accountant telling you the cost of your closing stock - surely you should be telling him the figure?

Didn't you do a physical stock-take? If not how the hell does he know the figure.

It's effectively a timing issue as the closing stock will be the following years opening stock.

A bit strong there. There are occasions where given certain figure the accountant could produce the stock figure accurately, farming businesses come to mind for one, as does construction.

Also if teh client is using the FIFO method of stock rotation it may be quite easy to establish a reasonable stock.

Also the client may have supplied stock values at sales price which the accountant has revalued to the lower of cost or net realisable value.

There could be a multitude of reasons why the figure has come from the accountant.

As for a stock take, for a business with a stock of £3,200 its fairly common not to have a formal stock take.

Just do some working in relation to your closing stock and go speak to your accountant and if required the figure will be adjusted.

Mikeyorks

The OP is confused at a proportionally very significant increase in his SA liability .... made the worse by POAs being demanded for the first time.

The (ill explained) question about stock came from a suggestion on his earlier thread that an increase in stock level (his drawings only look to be 50% of profit) may have contributed :

https://forums.moneysavingexpert.com/discussion/3014926=