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Accounting Principles for Tax Purposes bridges the gap between tax and accountancy and is the only work of reference that will guide you through the complex maze of accounting principles providing you with the key answers to interpreting accounts for tax and other purposes.
This is a practical work that is recognised in the tax profession as the bible for non-accounting professionals who have to use accounts in their work.
This new edition has been completely updated to examine recent developments affecting the interface between accounting and tax rules and regulations. This title is written for tax practitioners who wish to gain a better understanding of accounting rules in the UK, how these are applied in different circumstances to a set of financial statements and what the resultant impact on the taxable profit is.
The starting basis for tax computation for a business for either income tax or corporation tax is a set of accounts prepared in accordance with financial reporting standards. HMRC employ a number of accounting specialists who consider whether the accounting treatment in a particular case is correct. While this is particularly prevalent for large companies, it is also a key issue for the smaller business. Accounting flaws will have an impact on the tax treatment and may well give HMRC grounds for discovery assessments.
The previous edition was published back in 2010 and since that time there have been a number of important developments that necessitate a fifth edition. There is a fundamental change in the structure of UK accounting standards. For some time the existing set of standards that comprises UK GAAP have been viewed as no longer fit for purpose.
As a result, three new standards (FRSs 100-102) have been introduced and replace the existing standards as of January 2015. As they are loosely based on IFRS, accountants will have a range of issues to understand from changes in terminology to presentational issues. Includes the following cases: Smith vs HMRC (2011) STC 1724 where the recognition of income was queried; Greenback Holidays vs HMRC (2011) STC 1582 which focused on the definition and accounting treatment of goodwill; Greene King plc v HMRC (2012) UKFTT 385 (TC) which dealt with tax avoidance across different companies within a group and has major implications for tax advisors, taxpayers and auditors.