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When calculating tax numbers for accounts it is important to be clear on when new tax laws should be taken into account.

Where a company is part of a group which produces consolidated accounts, changes in tax laws are a common difference to consider in preparing both the group accounts and the subsidiary accounts. This is often because for calendar year end companies the consolidated accounts are produced before the UK Budget announcement whereas subsidiary accounts are prepared later in the year. Hence, disclosure of changes affecting future years may be needed in the subsidiary accounts.

Given that most tax law changes that are announced are prospective in nature, this is mainly relevant from a deferred tax perspective. Preparers must consider what laws will apply when deferred tax balances unwind in future periods. For example, with the recent changes in UK corporation tax rates, companies have had to recalculate deferred tax balances based on the revised rates. See the Computation of corporation tax guidance note for details of the latest rate changes.

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