8 - BL - VAT & CT Flashcards
What is the charge to VAT?
- any supply of goods or services
- where it is a taxable supply
- made by a taxable person
- in the course or furtherance of any business carried on by that person.
When is a person required to register for VAT?
- at the end of the month if their taxable supplies exceeded the VAT threshold in the previous 12 months.
OR
- at any time if there are reasonable grounds to believe that the value of their taxable supplies in a period of 30 days will exceed the VAT registration threshold
What is the current VAT registration threshold?
£90,000
A person can apply to be de-registered. What is the threshold?
88,000
What is Output tax?
The VAT charged by a business on its goods or services
What is Input tax?
The VAT paid by a business on the goods or services it buys.
What is the rate of standard VAT?
20%
What are the different rates of supply that a business can make?
- Standard rated
- Reduced Rate
- Zero rated
- Exempt
What is the rate of reduced rate VAT?
5%
How often are VAT returns submitted?
Every 3 months
What is the due date for a VAT return?
1 month and 7 days after the end of the period.
What is the threshold for annual accounting / cash accounting for VAT?
£1,350,000
What is the threshold for the flat rate scheme for VAT?
taxable turnover not exceeding £150,000
AND
total annual turnover not exceeding £230,000
If there is no VAT on the invoice for a vatable supply, the invoice is assumed to be inclusive of VAT true/false?
True
When does the financial year for companies end?
31 March
What is the main rate of CT
25% over £250,000
What is the small profits rate and when does it apply?
19% profits do not exceed £50,000
What is the percentage WDA for CAs?
18%
What is the level of CA AIAs?
£1,000,000 = 100% deduction
What is the Super-deduction?
130% of expenditure without limit up until 31 March 2023. Does not include a lot of items
Is there an annual exemption for CGT for companies?
No, but there is indexation frozen at 31.12.2017
What is Substantial Shareholding Exemption and when does it apply?
- No tax due when a company disposes of shares in a trading company
- must hold 10% of the ordinary shares for a consecutive period of 12 months within the last 6 years.
When does Rollover Relief apply?
- company disposes of qualifying business assets and buys another asset (includes members of group)
-sole trade/p-ship disposed of qualifying business assets and buys another qualifying business asset. - individual owns a business asset and sells it buying another qualifying asset and both assets:
- a company which is the individuals personal company; or
- a partnership of which the individual is a partner
What are qualifying assets for Rollover relief?
- Land & Buildings
- Goodwill
- Fixed P&M
- Ships and hovercraft
- aircraft, and
- Lloyd’s syndicate capacity
When must the replacement asses be purchased for Rollover relief?
12 month before or 3 years after the sale of the old asset.
What happens if the new asset costs less than the asset disposed of?
Rollover is restricted by the difference in cost
Proceeds from land sale £200,000
Costs £120,000
Gain £80,000
New land £180,000
less rollover (80k - (200k-£180k) £60k
Base cost £120,000
What happens if the replacement asset is
What is the CT charge on dividends received?
£0
What is the TTP threshold for paying CT?
£1.5m
(Below this annual payments, over this quarterly payments
When is CT due for TTP less than £1.5m?
9 months and 1 day after the APE
When is CT due for TTPmore than £1.5m?
Quarterly
When is a CT return due ?
12 months after the AP
How can CT trading losses be used in the current and previous years?
- against income AND gains of the same year
IF CANT BE USED IN CURRENT YEAR; - carry back to prev. accounting period against income AND gains (if carrying on same trade)
- claim within 2 years
IF ceases trading:
- loss in last 12 months can be carried back against income and gains for 3 prior years
How can CT losses be used in future years?
Automatically carried forwards
- set off restricted to £5m after which only 50% of profits may be offset (inc cap losses)
How much interest can a company deduct?
if greater than £2m can only claim interest against up to 30% of income receipts
What is a close company?
Company controlled by:
- 5 or fewer participators, or
- any number of participators who are also directors
BUT NOT IF:
- shares are quoted on a stock exchange, or
- cannot be controlled without including a non-close company
Which loans are not caught by s.455?
- loans for goods or services under normal terms / 6 months
- loan made in ordinary course of trade of money lending
- loan of £15,000 or less to a person who works for the company but has less than a 5% interest (shares or winding up) in the company
How can capital losses be used by a company?
- Can offset against gains in current or
- future years (subject to £5m / 50% restrictions).
- can’t offset against income
- can’t carry back
