Corporation Tax Liability (1) Flashcards
Financial year for corporation tax?
Runs from 1 April to 31 March
What is TTP calculated for?
Accounting periods
Where does a company pay corporation tax?
On its taxable profits
What is augmented profits?
A company’s taxable total profits plus dividends received
Corporation tax (main rate)
25% where augmented profits are greater than or equal to the upper limit of £250000
Corporation tax (small profits rate)
19% where augmented profits don’t exceed lower limit £50000
Corporation tax (marginal relief)
25% less marginal relief where level of augmented profits is betwen the limits
What must be done for marginal relief?
Calculate corporation tax at the main rate than deduct the relief
Standard fraction for FY2023?
3/200
If no dividends received/
(Taxable total profits/augmented profits) can be omitted since both taxable total profits and augmented profits are the same amount
What if there are no dividends?
There is a marginal rate of 26.5% which applies to any taxable profits that lie between upper and lower limits
When are lower and upper limits proportionately reduced?
If a company’s accounting period is less than 12 months
if the rates and limits for corporation tax are the same in both financial years?
Tax can be computed for accounting period as if it fell within one financial year
if rates for corporation tax are different in financial years and accounting profit falls into more than one financial year?
Taxable total profits are time apportioned between the financial years
When a marginal relief calculation is required for FY2023?
It is easier to time apportion the overall marginal relief calculation than to time apportion each separate figure
