I seem to have got into a bit of a mess with this.

I've made a loss in several years so no tax liability however two years ago I made a small profit. I followed all the instructions for posting the liability and then the payment.

However the accounts I submitted to the authorities were pre-tax i.e. didn't include the tax for that year as part of my expenses.

So now each time I try to prepare my accounts, the figures in Solar don't tally with what's in my official accounts and it causes me endless confusion trying to reconcile everything and make sure I submit the right figures.

So this is more an accounting question rather than a Solar one. Should I have included my tax as an expense in that year in my official accounts ?

It would make it a whole lot simpler if I should have as I can then just grab all the figures out of Solar and place them in my official accounts template document.

Hi Michelle,

If your businesses is a limited company, then we recommend you enter the tax expense into Solar Accounts on the last day of your financial year as described here:
http://www.solaraccounts.co.uk/help/how-to-record-an-annual-tax-liability.php
I believe that the annual corporation tax return (CT600) requires that you include the tax expense in your annual reports. In this regard the Profit and Loss figures in Solar Accounts would match your return.

Alternatively if you are self employed then you should treat your income tax as a personal expense, not a business expense, so it should not be entered into Solar Accounts. I believe the self-employed section of your income tax return will require you to enter the figures before tax so the figures in that section of your return will match the Profit and Loss figures in Solar Accounts. Other parts of the income tax return may ask you to calculate your tax amount but this will be based on the business profit AND any other personal income, and this tax amount will not affect the self-employed figures on future tax returns.

Note that I'm not an expert on personal or corporation tax returns - please check the above with your local tax office.

Regards

Whoops I missed that you had specifically mentioned corporation tax - in that case ignore my comments about personal tax returns.

The short answer is yes, the forms you submit to HMRC and Companies House should include corporation tax in the Profit and Loss statement, and so they should match what you have in Solar Accounts. (Note however that the calculation of the corporation tax figure should be based on the profit before tax)