Taxation

This error occurs on the Tax note if the corporation tax rate and reconciling amounts have not yet been entered or have been incorrectly entered into the Compliance Database > Financial > Financial Information > Tax Reconciliation. 

The first thing to do is ask the client do they have corporation tax rate entered for both the current and comparative year.

Once this is entered the note will look similar to the below. The reason the error message is occurring is because the reconciling amounts have not yet been entered into the compliance database. The amounts to enter in the compliance database can be found by calculating the difference between the Profit before tax multiplied by the corporation tax rate and the total tax charge for the financial year for the current and comparative year. 

In the below examples, the equations do not add up. 63 does not equal 100 in the current year column and 5 does not equal 0 in the comparative year column. The reconciling amounts need to be entered so that they equal to the totals.

In the current year, the Profit before tax multiplied by the corporation tax rate is 63 and the total tax charge for the financial year is 100, the difference between these is 37. This is what need to be entered into the Compliance Database > Financial > Financial Information > Tax Reconciliation.

This amount could be entered as a breakdown between different sections or posted as a total.

In the current year, the Profit before tax multiplied by the corporation tax rate is 5 and the total tax charge for the financial year is 0, the difference between these is -5. This is what need to be entered into the Compliance Database > Financial > Financial Information > Tax Reconciliation. This amount could be entered as a breakdown between different sections or posted as a total.

It is the client’s responsibility to know which section they should put the amount under, you can only advise what the total amounts are.

Once the correct amounts have been entered into the compliance database and the accounts have been refreshed, the error will be removed from the accounts.