Accounting for R&D Tax Credit
Hi All,
I'm after a bit of advice if anyone can help, especially from any Sage experts. I'm having one of those days...
We are submitting a claim for R&D Tax Credits for the previous financial year and expect a cheque from HMRC in the region of £10k (due to losses). Lovely jubbly. I am happy not to recognise the cash until we receive it since it is not guaranteed but dependant on the Revenue's view of the suitability of the project but (and this is where I am having a very blonde moment) I'm struggling to decide how to account for it when the time comes.
We use Sage Line 50 which is not always that malleable so the Chart of Accounts is the standard layout. My thinking is simply to Dr Bank and Cr Taxation charge (an account already set up for the P&L). This would effectively show as a negative overhead on the P&L.
Sage layout does not have anyway of showing Profit before Tax or Profit after Tax so I am stuck with treating it this way - I think....
My tiny brain is hurting now.
Anyone able to help at all? (Assuming I have made sense).
I'm after a bit of advice if anyone can help, especially from any Sage experts. I'm having one of those days...
We are submitting a claim for R&D Tax Credits for the previous financial year and expect a cheque from HMRC in the region of £10k (due to losses). Lovely jubbly. I am happy not to recognise the cash until we receive it since it is not guaranteed but dependant on the Revenue's view of the suitability of the project but (and this is where I am having a very blonde moment) I'm struggling to decide how to account for it when the time comes.
We use Sage Line 50 which is not always that malleable so the Chart of Accounts is the standard layout. My thinking is simply to Dr Bank and Cr Taxation charge (an account already set up for the P&L). This would effectively show as a negative overhead on the P&L.
Sage layout does not have anyway of showing Profit before Tax or Profit after Tax so I am stuck with treating it this way - I think....
My tiny brain is hurting now.
Anyone able to help at all? (Assuming I have made sense).
0
Comments
-
A client I do bookkeeping for got an R&D refund and I set up an 'other income' account on the P&L for it. I can't remember where it ended up in the final accounts though as I didn't do them. I wasn't using sage though.
Also, I don't know if it applies in your case but in that case the first year the company were behind on their PAYE payments and so the R&D credit was just set against that. I think they also set it against corp tax too sometimes.0 -
Hi Jodie,
Thanks for that. We're up to date with PAYE etc and have no CT liability hence opting for the cash option. I was thinking of 'Other Income' also as an option. Just a bit frustrating with Sage, it's not like a spreadsheet where I could put things where I want.
I know the auditors will rearrange things if they need to after Year End but I have a phobia of not having it right on the Management Accounts sent out to stakeholders (my anal side showing through!).0
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 12.5K For AAT students
- 325 NEW! Qualifications 2022
- 160 General Qualifications 2022 discussion
- 11 AAT Level 2 Certificate in Accounting
- 56 AAT Level 3 Diploma in Accounting
- 95 AAT Level 4 Diploma in Professional Accounting
- 8.9K For accounting professionals
- 23 coronavirus (Covid-19)
- 273 VAT
- 92 Software
- 275 Tax
- 138 Bookkeeping
- 7.2K General accounting discussion
- 202 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 345 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 583 Job postings
- 16 Who can benefit from AAT?
- 36 Where can AAT take me?
- 42 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 66 AAT membership