Redder Than Red
Registered User
- Messages
- 58
Hi all,
Bit embarrassing this but due to a fundamental misunderstanding of basic accounting I think I may have made a mistake and just wanted some clarity.
At year end we submit our old fashioned paper books to accountants to process and they always email back to say books are ready for collection about 10 days later, never any issue.
BUT this time they’ve taken weeks and I received a communication to say they have a lot of queries etc so trying to schedule meeting with them (which is taking longer than id ideally like).
Anyway i think i know what the problem is now. We were in line to turn a big (ish) profit this year so for the last 2 months of our year i began ordering in loads of stock to use up a small amount of the profits in the hope of using/selling it next year and reducing the profit for tax for this year as i thought it made sense.
But i’m assuming this is why they have queries now. So i googled it and it it seems what i did was stupid because now all the stock i bought has to be added to the profits anyway and taxed, is that right?
If so, id be guessing i bought 10,000 - 12,000 euro of paper (we are a printing company) which would have been left on the shelves ready for use in the new tax year. So basically does that now need to be counted as an asset/stock and factored in when the accountant submits the corporation tax for the year just ended?
And to save myself time here should i be now working out exactly what stock we had left over on the floor at year end for the accountant?
I had heard of people buying machinery to offset against corporation tax so in my stupidity i thought it would work the same way with stock but now appears i may have been wrong and created a bit of a mess for accounts?
Can anyone please confirm?
Bit embarrassing this but due to a fundamental misunderstanding of basic accounting I think I may have made a mistake and just wanted some clarity.
At year end we submit our old fashioned paper books to accountants to process and they always email back to say books are ready for collection about 10 days later, never any issue.
BUT this time they’ve taken weeks and I received a communication to say they have a lot of queries etc so trying to schedule meeting with them (which is taking longer than id ideally like).
Anyway i think i know what the problem is now. We were in line to turn a big (ish) profit this year so for the last 2 months of our year i began ordering in loads of stock to use up a small amount of the profits in the hope of using/selling it next year and reducing the profit for tax for this year as i thought it made sense.
But i’m assuming this is why they have queries now. So i googled it and it it seems what i did was stupid because now all the stock i bought has to be added to the profits anyway and taxed, is that right?
If so, id be guessing i bought 10,000 - 12,000 euro of paper (we are a printing company) which would have been left on the shelves ready for use in the new tax year. So basically does that now need to be counted as an asset/stock and factored in when the accountant submits the corporation tax for the year just ended?
And to save myself time here should i be now working out exactly what stock we had left over on the floor at year end for the accountant?
I had heard of people buying machinery to offset against corporation tax so in my stupidity i thought it would work the same way with stock but now appears i may have been wrong and created a bit of a mess for accounts?
Can anyone please confirm?