## Provision for Tax & Income Tax Refund in Cash Flow Statement
### Why This Is Needed
The P&L account shows the tax provision (an estimate). The Cash Flow Statement requires the actual tax paid in cash. These differ. Use the Provision for Tax ledger to find the cash figure.
### Provision for Tax Ledger
```
Provision for Tax Account
──────────────────────────────────────────────
Dr | Cr
Tax paid during year [PLUG] | Opening balance
Closing balance | P&L charge (CY)
──────────────────────────────────────────────
```
Tax paid (cash) = Opening provision + CY P&L charge − Closing provision
### Income Tax Refund
A tax refund received is a cash inflow under Operating Activities.
Presentation rule: Net the refund against gross tax paid:
> Net tax outflow = Gross tax paid − Tax refund received
Only the net figure appears in the Cash Flow Statement. If the refund exceeds tax paid, the net amount is shown as an inflow.
### Refund Receivable Ledger (if a refund asset exists)
```
Refund Receivable Account
──────────────────────────────────────────────
Dr | Cr
Opening balance | Cash received [PLUG]
P&L — tax refund | Closing balance
──────────────────────────────────────────────
```
### Summary Table
| Item | Cash Flow Line |
|---|---|
| Tax paid (gross) | Operating — outflow |
| Tax refund received | Operating — netted against tax paid |
| Net tax (paid − refund) | Single line in Operating Activities |