Backdating accounting

Posted by / 25-Aug-2017 17:48

Backdating accounting

Different considerations may apply from accounting and tax perspectives, and those aspects should be taken into account too.

What you can’t do Clearly, you can’t backdate a document so that is appears to have been signed on, say, 31 December, when in fact it was signed on 15 June.

This would be fraud, and would be likely to expose those involved to a number of different criminal offences.

Documenting what happened in the past What you can do is document a transaction which has actually happened in the past which had not been formalised.

That agreement may also provide for a historic ‘effective date’, so that the seller and buyer agree between themselves to treat the transaction as if it happened on 31 March.

This would involve, amongst other things, apportioning costs and revenue by reference to the effective date.

Disguising in-the-money options as at-the-money options through BACKDATING could thus lead the firm to take an improper deduction.

This deduction limit does not apply to qualified performance-based Code. New client contact – client works under “umbrella” company via agency, received pay over year, has no Tax & NI deducted receives payments gross. Manual worker, head in the sand now realises he needs to do something. From a legal perspective, the business sale agreement could potentially be signed in June, and the agreement may specify an immediate completion date (i.e.the date when legal ownership of the assets actually passes).

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For example, one group company may have lent money to another group company without documenting the arrangements in a written loan agreement.