Deferred Tax and Tax Reconciliations

Introduction to the Concept of Deferred Tax

• Why do we use it?

Deferred Tax Under UK GAAP

• General principles
• Permanent differences vs. timing differences
• Introductory examples

Deferred Tax Under IFRS

• General principles
• The tax base of assets
• The tax base of liabilities
• Taxable temporary differences
• Deductible temporary differences
• Initial recognition exemption
• Introductory examples

Recognition of Deferred Tax Assets

• Including dealing with loss carryforwards

Tax Rate Changes & Reconciliations

• Dealing with tax rate changes
• Examples with live tax rates (25%/26.5% from 1 April 2023)
• Tax reconciliations – identifying reconciling items
• Examples – deferred tax and tax reconciliations:
  • Capital allowances – including the 130% super-deduction
  • Research and development costs – SME relief and RDEC
  • Investment Properties
  • Gains rolled over
  • Voluntary revaluations
  • Interest-free loans
  • Loan relationships and derivatives
  • Consolidations and business combinations
  • Defined benefit pension plans
  • Deferred tax share-based payments – differences between deferred tax recognition under UK GAAP and IFRS
• Presentation and tax reconciliation disclosures – UK GAAP and IFRS

Our deferred tax course trainer is a UK Chartered Accountant and Chartered Tax Advisor with over 30 years of experience providing technical training on financial reporting and tax topics.

He also provides consultancy advice to tax account reconciliation firms and businesses on a variety of complex financial reporting and tax topics.

His training sessions are designed to be practical, commercially relevant and interesting.

Our deferred tax training will teach you the following:

• The role of deferred tax in financial statements.
• An understanding of when deferred tax is required under UK GAAP and how to calculate it.
• Understand how deferred tax is calculated under IFRS, including the effect of the initial recognition exemption.
• Identify all reconciling items to produce the tax reconciliations required by UK GAAP and IFRS, including the effect of the 130% deferred tax super deduction introduced by the Finance Act 2021.
• How future changes in tax rates affect the deferred tax calculation.

• The Deferred Tax training course is highly practical and will include multiple examples to assist with understanding the deferred tax rules.
• It is presented by an independent training professional and can be a completely independent look at the issues raised.
• The course will encourage participation and allow for all questions and clarifications to be considered.
• The course will always be completely current and relevant.

Our deferred tax course is a ‘must know’ for:

• Accountants and tax professionals who need to calculate or review deferred tax and tax reconciliation statements under either UK GAAP or IFRS

The course is also a ‘nice to know’ for:

• CFOs, FDs and FCs looking to understand how deferred corporation tax can affect their financial performance and position and why their effective tax rate reconciliation is different to the applicable tax rate of the company.

This deferred tax course is designed to help attendees understand the basis on which deferred tax is calculated under both UK GAAP (FRS 102) and IFRS (or FRS 101).

It will also enable attendees to calculate deferred tax assets and liabilities accurately and understand when deferred tax assets should be recognised in the financial statements, when deferred tax affects the tax expense in the deferred income tax statement and when it is recognised in other comprehensive income or equity.

This deferred tax course will also assist attendees in preparing or auditing the tax reconciliation required for medium and large companies to ensure that the difference between the actual deferred tax expense in the income statement and the product of the deferred tax accounting profit before tax and the statutory tax rate is fully reconciled with no ‘rounding differences’ or ‘other differences’ that have not been explained.