Tax return

[Jawz]

My accountant had just returned a draft of my end of year accounts. So there's corporation tax, but there is something that states:

Creditors: Amounts falling due within one year

Taxation and social security £xxxx
Other creditors £xxx

This appears seperate to the corporation tax, what is it? My personal tax? I'm probably being really thick, but any help is appreciated!

[Gonzo]

My accountant had just returned a draft of my end of year accounts. So there's corporation tax, but there is something that states:

Creditors: Amounts falling due within one year

Taxation and social security £xxxx
Other creditors £xxx

This appears seperate to the corporation tax, what is it? My personal tax? I'm probably being really thick, but any help is appreciated!

It depends on how your renumeration is structured but if your company pays you a salary greater than £5000 a year (that is not the exact figure but close enough for these purposes and I can't be bothered to look it up on a Sunday afternoon), then there will be some employers NI that your co must pay along with some PAYE tax that your co has deducted on behalf of the Inland Revenue. That may be the figure in question.

Usual disclaimer - I am not an accountant etc etc. But I see NixonWilliams has just logged on so if you are lucky you will get a better answer.

[Jawz]

Ok thanks, it was just that it's pretty high. I have to pay around £10K corporation tax and this other figure was over £20K and I'm not sure how it was calculated.

[Gonzo]

Ok thanks, it was just that it's pretty high. I have to pay around £10K corporation tax and this other figure was over £20K and I'm not sure how it was calculated.

20K sounds a bit high to be down to the explanation that I gave, but it does depend on how much salary yourCo pays you. Best ask your accountant.

[Nixon Williams]

My accountant had just returned a draft of my end of year accounts. So there's corporation tax, but there is something that states:

Creditors: Amounts falling due within one year

Taxation and social security £xxxx
Other creditors £xxx

This appears seperate to the corporation tax, what is it? My personal tax? I'm probably being really thick, but any help is appreciated!

Taxation and cocial security costs would usually be VAT, PAYE & NIC owing as at the year end date.

Other creditors would usually be the directors account - monies due to you as at the year end, ie salary, expenses & dividends owing to you but not paid as at the year-end date.

Remember that the Balance Sheet is a snapshot of the assets and liabilities of the company at the year end, these figures will change the next day as money is paid in and out of the bank account.

I hope this helps.

Alan

[Jawz]

Taxation and cocial security costs would usually be VAT, PAYE & NIC owing as at the year end date.

Other creditors would usually be the directors account - monies due to you as at the year end, ie salary, expenses & dividends owing to you but not paid as at the year-end date.

Remember that the Balance Sheet is a snapshot of the assets and liabilities of the company at the year end, these figures will change the next day as money is paid in and out of the bank account.

I hope this helps.

Alan

Ok thanks Alan, so basically thats something I will need to pay? It seems quite excessive (£22'000) and is usually due a year from year end?

[Nixon Williams]

Ok thanks Alan, so basically thats something I will need to pay? It seems quite excessive (£22'000) and is usually due a year from year end?

It hard for me to say without seeing the accounts but basiaclly the creditors are monies owed by the company at a given date, generally these will be taxes (CT, VAT, PAYE & NIC) and the directors' account.

Regards

Alan

[xoggoth]

Last seconded. These figures often are a bit notional. From my own accounts when accountants used to do them I think they just shoved whatever in "other" to make the BS balance since, among other errors, they nearly always got the tax etc wrong by using one month's instead of the quarter's worth that was really owed.

The whole point of doing a balance properly is to weed out any mistakes and most accountants do a crap fudging job IME. I have heard that the IR are starting to concentrate on balance sheets during PAYE check.

[Nixon Williams]

Last seconded. These figures often are a bit notional. From my own accounts when accountants used to do them I think they just shoved whatever in "other" to make the BS balance since, among other errors, they nearly always got the tax etc wrong by using one month's instead of the quarter's worth that was really owed.

The whole point of doing a balance properly is to weed out any mistakes and most accountants do a crap fudging job IME. I have heard that the IR are starting to concentrate on balance sheets during PAYE check.

As much as it pains me to say it, I agree with much of what you say. Many "accountants" do not have any idea what is included in the Balance Sheet, I see this often when we takeover a new client from another accountant.

We reconcile all the accounts so that we can advise clients if they have overpaid a salary, taxes etc or if an invoice has not been paid in full.

Alan

[Troll]

Doesn't everybody else treat Corporation Tax as optional?