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How to adjust your Corporation Tax liability figures

This article explains how to adjust your Corporation Tax liability figures in FreeAgent.

If your company's Corporation Tax figure in FreeAgent is different from your accountant's figure, you will need to work out the difference between the two figures and post the difference as a pair of journal entries.

The date of the journal entries should be the end of your accounting year. Do not post the whole payable figure that your accountant has calculated as a single entry or you will double-count the payment. If you’re in any doubt about how to do this, please speak to your accountant.

You’ll need to have full (level 8) access to your FreeAgent account to post journal entries.

For more details on how FreeAgent calculates your Corporation Tax liability, please see our guide to Corporation Tax in FreeAgent.

Adjusting the figures

Navigate to the 'Accounting' tab at the top of the screen and select 'Journal Entries' from the drop-down menu.

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Next, select 'Add New Journal Entries'.

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Increasing the figures

If your accountant's figure is higher than the figure in FreeAgent (i.e. you have more tax to pay than FreeAgent has worked out), then you should credit code ‘820 Corporation Tax’ and debit code ‘502 Corporation Tax Expense’.

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Decreasing the figures

If your accountant's figure is lower than the figure in FreeAgent (i.e. you have less tax to pay than FreeAgent has worked out), then you need to credit code ‘502 Corporation Tax Expense’ and debit code ‘820 Corporation Tax’.

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Once you have completed this process, your Corporation Tax liability in FreeAgent will be correct, but the journal entries won’t have an impact on your CT600 form or its supporting calculations.

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