Why is my tax liability in FreeAgent different to my accountants’ calculations?

FreeAgent shows your tax liabilities in the Tax Timeline on the Overview page but the figure will rarely agree with the amount your accountant has calculated and told you to pay.

The reason for the difference is, as FreeAgent say on their website:

The figures in FreeAgent are a projection of your company’s ball-park corporation tax figure. They may not agree to the figures worked out by your accountant but they should be in the correct region

Despite what FreeAgent say about correcting the difference I believe your accountant should be making the corporation tax account (820) agree with the actual amount you have to pay, not you. However, irrespective of who does do the journal entries the adjustment will not affect the figure shown on the Overview page.

P.S. It suddenly occured that I hadn’t explained exactly why your accountant does come up with a different figure than FreeAgent! I could bore and confuse you with a detailed explanation of tax relief on fixed assets and disallowable expenses but in simple terms the answer is

Tax is too complicated for it to be calculated in a simple way!

 

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