Disallowed Expenses

Guidance:

This is a really handy summary of all of the items you have marked throughout the working papers as disallowed expenses for corporation tax purposes.

Step-by-Step:

The help guide from Silverfin on how to use the template itself is here

Explanation:

A disallowed expense is when you have incurred a cost in the Profit & Loss Account that is disallowed for corporation tax calculations.  This is generally where the basis of the calculation is subjective or the cost is not considered wholly and exclusively for business purposes.

Examples:

-  depreciation,
-  fines and penalties,
-  client entertaining,
-  business gifts,
-  legal fees relating to capital items,
-  movements in general provisions
-  remuneration not paid within 9 months of the period end.

Where you are looking at disallowing accruals (such as pension payments not made or bonuses not paid within 9 months), it is important that you apply the Disallowed Expenses template to the relevant profit and loss expense nominal code reconciliation (i.e. staff wages or pensions) and not the accrual or liability reconciliation.