Chapter 14 - Intro to Corporation tax

Question 1

What is any period for which a company prepares accounts.

Answer 1

Period of account

Question 2

What is an accounting period never longer than?

Answer 2

12 months

Question 3

When does an accounting period start?

Answer 3

• When a company starts to trade

- When the previous accounting period ends

Question 4

When does an accounting period end?

Answer 4

• 12 months after beginning of accounting period
• The end of the company’s period of account
• The date the company ceases to trade

Question 5

How do you divide a long period of account?

Answer 5

First AP: First 12 months of long AP

Second AP: The balance of the long period

Question 6

What are companies resident in the UK chargeable to corporation tax on?

Answer 6

All profits, wherever they arise.

Question 7

When is a company UK resident?

Answer 7

When it is…

• Incorporated in the UK
• Incorporated elsewhere but centrally managed in UK

Question 8

What are a companies Taxable total profits (TTP)?

Answer 8

Taxable total profits (TTP) = Total profits – Qualifying charitable donations

Question 9

Corporation tax proforma

Answer 9

Tax adjusted trading profit X 
Interest income X 
Property income X 
Miscellaneous income X 
Chargeable gains X

Total profits X
Less: Qualifying charitable donations (QCD) (X)
Taxable total profits (TTP) X

Question 10

Companies pay what on chargeable gains

Answer 10

Corporation tax

not capital gains

Question 11

What is corporation tax charged on

Answer 11

Taxable total profits (TTP)

Question 12

Where would patent royalties receivable in respect of non-trade related patents be included?

Answer 12

Miscellaneous income