Excuse me?

Another former senior tax inspector said: "One of the problems the Revenue has is that the company doesn\’t have to disclose the amount of tax actually paid in any year and the accounts won\’t reveal the liability. Each company has its own method of accounting for tax: there\’s no uniform way of declaring it all."

Surely the Revenue can just look at the cheques it has received to work out how much tax a company has paid?

9 comments on “Excuse me?

  1. It’s even more mysterious than that.

    On the Corporation Tax return you have to calculate the amount outstanding at the date of the return by deducting the amount already paid from the total payable.

  2. the govt has made it awkward for the IR to work out how much tax a company has actually paid in any given year. First of all, a company’s accounting yuear might not mirror the tax year. A company that pays dividends has to make a down-payment of Corporation tax – ACT. And also, I think that companies pay the residue of CT 9 months after the end of the accounting year – so you can get the IR receiving an amount for one particular tax year a year or sso after it has ended.

  3. Um, ACTs not been around for about, oh, 10 years now.

    It’s a lot “easier” these days – you make quarterly payments on account – two before the year end, two after.

    Besides which, on the tax computation will be a line showing the tax charge for a year.

    It’s a mystifying comment on the face of it. That said, for various reasons too tiresome to explain, current tax charges in a set of accounts are much more of a best guess than you might expect (not the least of which is that the responsibility for calculating the current tax position for the accounts is always delegated to the most junior member of a tax team…)

  4. “Um, ACTs not been around for about, oh, 10 years now.”

    Hence the pension “robbery” of Gordon, which isn’t quite as simple as the Daily Mail and Telegraph would have us believe.

  5. Richard: exactly. I have just this moment finished a corporation tax compuation, and like all the other I have filled out, it has a line showing the tax payable for the year.

    Kay, the pension robbery was exactly that, The abolition of ACT never affected the amount of company tax due, but possibly the exact timing of the payment to the Revenue.

  6. Wasn’t there a 2% reduction in coporation tax on the same day? So it’s a bit like saying an increase in VAT to fund cuts in council tax is a ‘raid on goods and services’

  7. “Kay, the pension robbery was exactly that, The abolition of ACT never affected the amount of company tax due, but possibly the exact timing of the payment to the Revenue.”

    It didn’t affect the amount of CT, no. But it did affect very much how dividends were taxed in the hands of the recipient.

  8. how those 10 years have flown by – to think that generations of students will no longer have to learn about the idiocies of ACT and foreign income dividends. But does anyone know what has happened to the estimated £6bn of unrelieved ACT that the Govt was sitting on 10 years ago?

  9. Shadow ACT. A work of malevolent genuis – you theoretically were supposed to calculate this nominal tax on the same basis as actual ACT, but had to create a dummy offset of it before you could actually use actual ACT.

    In my experience, virtually everybody took the hint and just accepted that any ACT they may have had was gone for ever.

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