Corporation Tax The screen

Here's some information about the corporation tax screen and how FreeAgent works out your company's corporation tax projection.

Finding the corporation tax screen

The corporation tax screen is under the Taxes menu.

I can't see it.

If you're a sole trader, or your business is a partnership, you won't see this screen because your business doesn't pay corporation tax.

Looking at a tax year

Choose which tax year you'd like to see the figures for.

Then click on it from the list.

This brings up the corporation tax screen.

You can see then that FreeAgent produces a full basic computation, using the figures that you've put into your accounts. This is why it's important to enter capital assets properly and to make sure your costs go into the right category, because some costs, such as business entertaining, have to be added back to the profit in your accounts before corporation tax is worked out.

Ball-park projection only

Remember that the figures in FreeAgent are a projection of your company's ball-park corporation tax figure. They may not agree to the figures worked out by your accountant but they should be in the correct region. If they're very different from your accountant's figures, then please let us know by e-mailing support@freeagent.com

Adjusting the figures

If your accountant says your tax should be different, you need to post journal entries to change it in your accounts.  Please note that this will not affect the tax figure on the Overview screen.

Work out the difference between FreeAgent's figure and your accountant's, and post this difference only as journal entries.  Don't post the whole figure that your accountant says is payable, or you will be double-counting the payment.

The journal entries should be dated as at the end of your financial year.

If your accountant's figure is higher than FreeAgent's (more tax to pay), then you should credit account 820 Corporation Tax and debit code 502 Corporation Tax Expense.

If your accountant's figure is lower than FreeAgent's (less tax to pay), then it's the other way round - debit code 820 Corporation Tax and credit account 502 Corporation Tax Expense.

Tax on the Overview screen

FreeAgent will work out the tax due according to the figures you've entered, and put this figure on the tax timeline on the Overview screen, so that you can see, at a glance, a projection of how much corporation tax the company is due to pay.

This lets you set money aside in plenty of time to pay the tax.

Remember that the corporation tax payment is due a month earlier than your actual corporation tax return. The tax timeline highlights this for you.