Corp Tax - Chapter 22

Question 1

Which payments must 20% tax be deducted?

Answer 1

• Annual interest on debentures/loan stock to individuals
• Annual payments or patent royalties to individuals
• Royalties on certain intellectual property to overseas persons

Question 2

Interest and royalty payments made before 1 June 2021 by a UK company to an EU associate company made GROSS or NET

Answer 2

Gross

In the case of interest payments, an
exemption certificate was required.

Question 3

Annual Payment Characteristics

Answer 3

• It must be payable under a legal obligation.
• The obligation must extend for more than one year.
• It must be income, not capital, in the hands of the recipient.
• It must represent pure income profit to the recipient. A sum is pure income
  profit if the recipient does not have to do anything in return for receiving the
  payment.

Question 4

Do companies suffer IT on amounts received from other UK Companies?

Answer 4

No and do not withhold tax

Question 5

Do companies suffer IT on amounts received from individuals?

Answer 5

Yes, rec’d net of 20% tax.

Question 6

Account for IT on a quarterly basis, on which form?

Answer 6

CT61

Question 7

What dates are the quarters?

Answer 7

31 March, 30 June, 30 September and 31 December. If a company’s year end is
different from any of these dates, there will be five return periods,

The return and any tax is due 14 days following the end of the return period.

Question 8

If the tax withheld exceeds the tax suffered, the net amount is the amount of tax the company must ???? .

Answer 8

Pay to HMRC

Question 9

If the tax suffered by the company exceeds the tax withheld, a refund of tax is required from HMRC for that quarter. However, HMRC ????? repay more than the amount of tax that the company has already paid over so far in the accounting
period.

Answer 9

will not

Question 10

What happens to excess tax

Answer 10

Carried forward to later AP.