Business Tax and dividends from group companies

Introduction

The company has received dividends from group companies which should not be included in box 38.

How does Business Tax cope with this?

1. For IRIS chart client specific changes select Edit | Business Tax Accounts, (or select FII Edit in the Tax calculation data entry screen).

2. Select Franked investment income. This displays a list of all the accounts Business Tax includes in box 38.

3. Highlight the account number you have posted the group dividends to in Accounts Production and click Delete.

4. When asked if you want to delete the account, click Yes and then exit the Setup option.
   

Now that you have removed the account from Franked investment income, Business Tax will no longer automatically remove the income in the Trading Profit/Loss calculation.

To correct this:

1. Select Edit | Posting and make an Income disallowed posting disallowing the total on the dividend account.

2. For a global change select Setup | Business Tax Accounts and click OK to the chart. Remove the account code from Franked investment income.
   

If you are using the ELTD chart:

Dividends from group companies should be posted to account 109. This account is deducted from the Trading profit but not included in the Franked Investment Income.

If a different account has been used follow the procedure outlined for IRIS chart users above to change the Business Tax Accounts option.