Does last years tax payment come out of this years profits?

Pink_Mink

Hi guys, hopefully a quick question...and probably a silly one! I'm just cobbling together my accounts for this year ready to send off to my accountant and I'm just guess-timating what tax will be due.

My accounting year runs from Sep to Aug. I sent a payment to HMRC in Jan this year to cover last periods tax bill. So would that payment be deducted from this periods profits?! If that makes sense!

Like I said probably a silly question, and the answer will probably be "Yes of course it will!"

Cheers!

liam8282

Payment of tax is not deducted from the profits.

It is not a profit & loss item, not tax deductable.

Pink_Mink

Thanks Liam! )

Brassedoff

Can I suggest you find the local authority near you who will offer free get in to business courses? Running a business without the knowledge that is fundamental to run a business is something you could do with having help with. I am saying that in the nicest way.

You never know, you might get a tip or two that will make you more money.

persa

Tax itself is 'below the line', but any late/early interest will be deductible. If there is any, separate it out from the tax itself, don't just net it off.

Bean_Counter

When you prepared your accounts from Sep to Aug was there not an accrual for the CT that would be payable. The tax paid this year would be set against this accrual.