Corporation Tax Flashcards
What is the corporate tax rate?
19%
If company profits don’t exceed £1.5million, corporation tax must be paid how long after the end of its accounting year?
9 months and 1 day
How long after the end of a company financial accounting period must corporation tax return be paid?
12 months
If a company’s profits exceed £1.5 million, how must the tax be paid?
Quarterly installments
What is the basic formula for computing corporation tax for a company’s accounting period?
Trade Profit + Other Income + Chargeable Gains - (Charitable Donations) x 19%
What is the basic formula for the calculation of trade profit?
Trade income - (cost of sales + capital allowances)
Are salaries and bonuses paid to directors/employees an allowable deduction against a company’s taxable trading profits?
Yes
Are dividends a deductible expense for a company for corporation tax purposes?
No
Do companies receive an annual exemption?
No
What is replacement of business asset relief (aka rollover relief?)
Company is entitled to CGT relief when it disposes of a capital asset at a profit and uses the profit to buy a replacement asset
What is the calculation for replacement of business asset relief?
Cost of the new asset - gain made when asset is sold
What 3 options does a company have if it makes a loss in a particular year?
- Set it against total profits in the current accounting period
- Carry it back to set it against total profits in the preceding 12 months
- Carry it forward to set it against total profits of a later accounting period
What is a close company?
A company which is in the UK and controlled by:
1. 5 or less shareholders or
2. Any no. of directors who are also shareholders
If a close company makes a loan to a SH who is also an employee/director and charges no interest or below the official rate, the forgone interest is a taxable benefit if the loan exceeds what amount?
£10,000
A close company that makes a loan to a s/h must pay HMRC an amount equal to what percentage of the loan?
32.5%
