WIP it up

We are having difficulty with a tax office concerning the valuation of work in progress in an interior design company.

Each year the client has opening work in progress and closing work in progress. We have agreed a valuation figure with the tax office which is different to that in the accounts as at 31 March 2009 but cannot agree on how this figure is treated.

Our argument is that the closing figure (whatever it is) is simply the opening figure for the following year’s accounts.

However the tax office is seeking to make a ‘one-off adjustment’ to the year under enquiry. We really cannot see how that can be correct and have not experienced this treatment before.

Could readers let us have their comments on this matter please?

Query 17 918 – Mr Whippy

Reply from Hodgy

I agree that any adjustment to work...