Corporation Tax (Recap) Flashcards
(24 cards)
what is TTP?
total taxable profits
combination of gains and income
when is a company UK resident?
- if it is incorporated in the UK or,
- it is centrally managed in the UK
which companies are subject to UK CT?
companies resident in UK are chargeable to UK CT on their worldwide profits
non-resident companies are chargeable to UK CT on profits of permanent establishments in the UK & gains of disposals of UK property
what is a company’s accounting period?
- when a company starts trading
- when the previous accounting period ends
can an accounting period exceed 12 months?
no
when does an accounting period end?
- 12 months after beginning of accounting period
- the end of the company’s period of account
- company’s ceases/begins trading
- company ceases to be UK resident
trading income pro-forma?
net profit xxx
add: disallowed expenditure xxx
add: taxable income not in accounts xxx
deduct: non-trading income taxed elsewhere (xxx)
deduct: capital allowances (xxx)
equals: adjusted trading income/loss
property income basis?
accruals basis for corporations
property income pro forma?
rent accrued xxx
less: allowable deductions (xxx)
equals: property income (xxx)
is interest payable on a loan to acquire a property an allowable property income expense?
no
instead, relief is given under the loan relationship rules
how are chargeable gains handled under CT?
CT is charged on any chargeable gains made by a company
NTLR?
non-trading loan relationship
loan relationships that do not relate to trading (e.g., loan to acquire shares)
qualifying donations?
qualifying charitable donations (QCD) are deductible in the period in which they are paid (cash basis)
all amounts are paid gross (unlike gift aid)
how are dividends taxed under CT?
usually exempt from CT
they will usually impact the due date for payment of CT (TTP + exempt dividends = AP)
corporation tax penalties?
penalties for failure to make a return
persistent failure to make a return = 3 consecutive late returns
when/how do ‘large’ companies pay corporation tax?
in 4 instalments by the 14th day of the 7th, 10th, 13th and 16th month after the start of a 12-month accounting period
a company is not treated as large if…
- has a tax liability of less than 10,000
- was not large in previous 12 months and augmented profits are no more than 10,000,000 in current year
how are augmented profits altered if a company has associated companies?
AP limit is divided by the number of associated companies
what is the number of associated companies based on?
(for rate of corporation tax)
the number of associated companies throughout the period
including joiners and leavers
what is the number of associated companies based on?
(for payment of corporation tax)
the number of associated companies at year end
when/how must very large companies pay CT?
in 4 instalments on the 14th day of the 3rd, 6th, 9th and 12th month following the start of a 12-month accounting period
what is a very large company?
company with AP larger than £20m
what is a large company?
company with AP larger than £1.5m
under what condition can a very large company not have to pay tax in instalments?
if its tax liability is less than 10,000
