Re-posting this in the correct topic.
I have filed my annual accounts for the first time and now in process of completing the the CT600 online.
My Profit & Loss Account shows a gross profit as follows:
Cost of Materials (£3,000)
Other charges (£2,000)
When this is carried over to the Corporation Tax form
CP7 Turnover/sales: 6,000
CP8 Cost of sales: 5,000
CP14 Gross profit: 1,000
Note above figures are automatically entered in to the fields of the form.
When I complete the expenses section in computations, it then shows:
CP39 Gross profit or loss £1,000
CP40 Total expenses £2,000
Gross profit or losses before adjustments £-1,000
My question is:
1) Why does Gross Profit change to show loss of £-1,000 ? This does not include cost of materials/products which is £3,000 making up the £5000 for Cost of Sales. if I add that it would show a loss of £-4000 but my accounts show a profit of £1000.
2)Do I need to include the the £3,000 for cost material/products in the expenses section of the computations? If yes, then in which section do I put them in.
This is the first time I am filling my company accounts after first year of trading and I am not sure why the corporation tax filing shows a loss and therefore no tax due.
I would be grateful if anyone can help me explain and/or answer the above two questions using the same figures as I do no not want to submit an incorrect tax return and risk being fined by HMRC etc.
Thank you in advance.