Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

ACA Tax > Chapter 12 - Corporation tax – payment and administration > Flashcards

Chapter 12 - Corporation tax – payment and administration Flashcards

1
Q

Q: What is the augmented profits limit for FY23 for a 12-month accounting period?

A

A: £1,500,000.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Q: How is the augmented profits limit adjusted for shorter accounting periods?

A

A: It is reduced proportionately (e.g., £1,500,000 × months ÷ 12).

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Q: When is corporation tax due if a company is not large?

A

A: 9 months and 1 day after the end of the accounting period.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Q: What are augmented profits?

A

A: Taxable total profits (TTP) + dividends received from non-group companies.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Q: How is the augmented profits limit adjusted for associated companies?

A

A: Divide the £1,500,000 limit by the number of associated companies.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Q: What qualifies a company as large for corporation tax purposes?

A

A: Augmented profits exceeding £1,500,000 (adjusted for associated companies and short periods).

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Q: When must a large company pay corporation tax?

A

A: In four instalments on the 14th day of months 7, 10, 13, and 16 from the start of the accounting period.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Q: Under what conditions is a large company exempt from paying corporation tax in instalments?

A

A: If tax liability is <£10,000, or if the company is not large in the previous period and augmented profits ≤ £10m.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Q: What is the augmented profits limit for very large companies?

A

A: £20,000,000 (adjusted for short periods and associated companies).

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Q: When must very large companies pay corporation tax?

A

A: In four instalments on the 14th of months 3, 6, 9, and 12 from the start of the accounting period.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Q: When must a company register for corporation tax with HMRC?

A

A: Within 3 months of the start of its first accounting period.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Q: When is the filing deadline for a corporation tax return?

A

A: 12 months after the end of the accounting period.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Q: How long does HMRC have to amend obvious errors in a corporation tax return?

A

A: 9 months from the actual filing date.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Q: How long does a company have to amend its corporation tax return?

A

A: 12 months from the due filing date.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Q: How long must corporation tax records be retained?

A

A: 6 years from the end of the accounting period.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Q: What are the Senior Accounting Officer’s (SAO) responsibilities for large companies?

A

A: Certify annually that accounting systems produce accurate tax information.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Q: How is interest on overpaid corporation tax treated for tax purposes?

A

A: It is taxable as non-trading loan income.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Q: How is interest on late-paid corporation tax treated for tax purposes?

A

A: It is deductible as a non-trading loan relationship expense.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Q: When does interest on late-paid corporation tax begin to accrue?

A

From the day after the due date until the tax is paid (inclusive).

20
Q

Q: What is the maximum penalty for failing to keep adequate corporation tax records?

A

A: £3,000 per period (£500 for VAT records).

21
Q

Q: What are associated companies, and why are they important for corporation tax?

A

A: Associated companies are companies under common control. They reduce the augmented profits limit by dividing it among the number of associated companies.

22
Q

Q: What must companies include in their CT600 corporation tax return?

A

A: A self-assessment of tax liability, supporting tax computations, and accounts in iXBRL format.

23
Q

Q: How is the £10m limit for exemption from quarterly instalments adjusted?

A

A: It is scaled down for short accounting periods and divided by the number of associated companies.

24
Q

Q: When does HMRC’s enquiry period end for a corporation tax return filed on time?

A

A: 12 months after the actual filing date.

25
Q

Q: When does HMRC’s enquiry period end for a late-filed corporation tax return?

A

A: By the quarter day following the 12-month anniversary of the filing date (quarter days: 31 Jan, 30 Apr, 31 Jul, 31 Oct).

26
Q

Q: What is overpayment relief, and how long do companies have to claim it?

A

A: Overpayment relief allows companies to claim a refund for overpaid tax due to errors in their tax return. Claims must be made within 4 years of the end of the accounting period.

27
Q

Q: What types of penalties can HMRC impose for corporation tax non-compliance?

A

A: Penalties for incorrect returns, failure to notify chargeability, and failure to keep adequate records.

28
Q

Q: What is the maximum penalty for failing to appoint a Senior Accounting Officer (SAO) or submit an accurate SAO certificate?

A

A: £5,000 for each offense.

29
Q

Q: When does repayment interest from HMRC start accruing?

A

A: From the later of the due date or the date of actual payment until the repayment date.

30
Q

Q: What is the purpose of the augmented profits limit?

A

A: To determine whether a company pays corporation tax by instalments and whether it is classified as large or very large.

31
Q

Q: What are the four payment dates for large companies paying corporation tax in instalments?

A

A: The 14th of months 7, 10, 13, and 16 from the start of the accounting period.

32
Q

Q: What are the four payment dates for very large companies paying corporation tax in instalments?

A

A: The 14th of months 3, 6, 9, and 12 from the start of the accounting period.

33
Q

Q: What are the record retention requirements for VAT under Making Tax Digital?

A

A: Some VAT records (e.g., VAT on sales) must be kept digitally using compatible software; others (e.g., import VAT certificates) must be kept in original form.

34
Q

Q: What factors lead to higher penalties for late filing of corporation tax returns?

A

A: Persistent late filings (e.g., the third consecutive late return) or significant delays in submission.

35
Q

Q: What must companies do within three months of starting their first accounting period?

A

A: Register for corporation tax with HMRC and state the start date of the accounting period.

36
Q

Q: How are late payment penalties calculated for corporation tax?

A

A: Based on the length of the delay and whether it is the first, second, or third consecutive late submission.

37
Q

Q: What is the penalty for failure to keep adequate PAYE records?

A

A: Up to £3,000 per tax year or accounting period.

38
Q

Q: What is the threshold for a company to avoid being classified as very large for corporation tax instalments?

A

A: Augmented profits must be ≤ £20,000,000 (adjusted for short periods and associated companies).

39
Q

Q: How does HMRC calculate penalties for third consecutive late corporation tax returns?

A

A: They impose higher penalties than for the first or second offenses.

40
Q

Q: What happens if a company fails to file its CT600 return online?

A

A: The return is considered not filed, and penalties for late filing may apply.

41
Q

Q: What is the penalty for failing to notify HMRC of a Senior Accounting Officer’s name?

A

A: £5,000.

42
Q

Q: How do shorter accounting periods affect corporation tax payment limits?

A

A: Both the augmented profits limit and the £10m/£20m thresholds are scaled down in proportion to the length of the accounting period.

43
Q

Q: Can HMRC correct arithmetical errors in a corporation tax return?

A

A: Yes, within 9 months of the actual filing date.

44
Q

Q: What information must companies keep for corporation tax purposes?

A

A: Sales and purchase records, bank statements, cashbooks, and other relevant accounting records.

45
Q

Q: What is the maximum penalty for failing to keep digital VAT records under Making Tax Digital?

A

A: £500 per tax period.

46
Q

Q: When are tax payments due for a company with augmented profits below £1,500,000?

A

A: 9 months and 1 day after the end of the accounting period.

ACA Tax (10 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions