Corporation tax calculation rates & reliefs

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  • Updated 7 years ago
It looks like FreeAgent's corporation tax calculation doesn't include all corporation tax rates, Marginal Small Companies Relief and Marginal Starting Rate Relief. Is that correct?

We were recently in the fortunate position of falling into this category and there was a significant discrepancy between the figure FreeAgent was predicting and what our accountant and HMRC [1] came up with. Unfortunately the figure in FreeAgent was significantly lower which meant we got a slightly nasty surprise when we saw the real figure.

Would it be possible to make FreeAgent's calculation take all this into account. Alternatively, perhaps the figure could be flagged as potentially inaccurate if it hit a certain threshold? Anything to avoid such a nasty surprise!

Thanks for a great product.

James.

[1] http://mrrcalculator.hmrc.gov.uk/
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floehopper

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Posted 7 years ago

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Janice Atherton, Official Rep

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Hi James

Thanks for getting in touch.

Unfortunately the corporation tax is a ball park figure and may still differ from your accountant's year end calculations. It is a tool allowing users to budget for these year end costs; it's not intended to replace specialist tax calculation software nor can it take the place of your accountant's expertise. This is why we do recommend that our limited company users work with an accountant.

Please refer to this link for more information on how the corporation tax works in FreeAgent; http://www.freeagent.com/support/kb/t...

This link also explains how to adjust the figures worked out by FreeAgent.

It may be something we look to improve in the future but we i'm not aware of any concrete plans or timescales for this.

Sorry I can help more on this occasion.

Kind regards
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floehopper

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Thanks for the swift response. We do use an accountant, but (as I suspect is the case in many small companies) the corporation tax calculation tends to get left until the end of the company year. During the year, we've tended to use the FreeAgent figure as a guide. We will now be much more wary of this, but I reckon others will find themselves in the same boat.

Given that figures in FreeAgent are mostly very accurate, I think it's natural to assume the corporation tax figures are similarly accurate. I think it would be really useful to at least display some kind of disclaimer wherever the corporation tax figure appears. The disclaimer could point at the link you posted to explain matters more comprehensively.

By publishing accurate and potentially inaccurate figures alongside each other without such a disclaimer, I think you run the risk of users starting to doubt other perfectly good calculations in FreeAgent.

Regards, James.
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Janice Atherton, Official Rep

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Hi James

You've got a valid point and I will certainly raise it with the Development Team.

It may be that it's already on the cards as part of our redesign work which is ongoing but I'll certainly check.

Kind regards

Janice
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floehopper

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Many thanks.
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Jehnavi

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There will be no shortage of advice for you as most tax software providers will be anxious to secure your business!
http://taxprintindia.com/income-tax-s...