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Post Info TOPIC: Corporation tax or not ?
BazzaS


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Corporation tax or not ?
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I have a loss in the P&L of 500 which includes depreciation of 700.

The normal corporation tax calculation is: P&L add back depreciation - in my case -500+700 = 200 @ 20% = 40

But that means I'm paying corporation tax only on depreciation.

Is this correct ?



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Casu


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I thought you were the bookkeeper, why is the Accountant not doing this?

What would you do if it was £500 profit?

Wonder what else you may have missed?

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Caron
Leger


Master Book-keeper

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Hi Barry

That's right, the depreciation is an accountancy exercise and is disregarded for CT purposes.  You're not paying tax on the depreciation, you're paying tax on the profit before depreciation is taken into consideration.

Presumably you have already claimed AIA or capital allowances, and tax will have been saved on that.

 

 



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John 

 

 

 Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
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