Limited companies - how to account for Corporation Tax

Steps to take if you don’t have an accountant

1. Calculate the tax amount to pay
2. Create a bill with the amount to pay dated end of year 1 (31 October 2023) and categorised as ‘Corporation tax cost’
3. Pay the tax and categorise the payment as ‘Corporation Tax liability'
4. Match the bill you created to the tax payment

Steps to take if you have an accountant who has access to your data.

1. Your accountant calculates the tax amount to pay
2. Your accountant creates a journal dated end of the year 1 (31 October 2023) to:
1. Debit Corporation tax cost
2. Credit Corporation tax liability 
3. You pay the tax and categorise the payment as ‘Corporation Tax liability'