Corp tax

Question 1

Companies that are resident in the U are taxed on

Answer 1

Their worldwide profits

Question 2

Non resident companies are taxed on

Answer 2

UK income and gains if they are trading in the UK via an agency

Question 3

No accounting period can

Answer 3

Exceed 12 months

Question 4

Where shares in UK comanies are held as assets rather than investments

Answer 4

The dividends recieved will be treated as trading profits.

Question 5

Pre trade expenditure

Answer 5

Is allowable up to 7 years previous

Question 6

Property Business Income

Answer 6

Capital allowances on plant and machinery (not furniture) are taken into account.

Question 7

There is a restriction on

Answer 7

The loan interest (mortgage) paid by a company to buy or improve a property. The loan relationship rules apply instead.

Question 8

QCD

Answer 8

Qualifying charitable donations are deductible from total profits.

Donations to local charities which are incurred wholly and exclu are deducted.

Question 9

Non trade intangible assets

Answer 9

If used for non trade purposes, the Dr and Cr net off. Cr is misc income, and then a claim can be made for all or part to be set off against total profits. Any Dr remaining can be carried forwards

Question 10

Dividends recieved by a company are usually

Answer 10

Exempt

Question 11

Augmented profits =

Answer 11

Total taxable total profts plus non group dividends received

Question 12

Loan relationships

Answer 12

Income and expenses recorded in the accounts that relate to money debts (where a company had borrowed or lent money)

Question 13

What is classed as non trading loan relationships?

Answer 13

Purchase invetsment property
Shares in another company
EMployee loan written off
Gains/losses ont he sale of loan stock or gov stock
Most interest income

Question 14

What are the two treatments of intangibles?

Answer 14

The accounts basis, where it is for trade purposes and the debits and credits

Question 15

Amortisation of goodwill is

Answer 15

Not deductible

On disposal the company is. taxed on the difference between proceeds and cost and is taxed as trade income or a non trade loss

Question 16

The maximum income gain eligible for rollover is the proceeds less cost.

Answer 16

You can get rollover / reinvestment rrlief on intangibles as long as another intangble asset is purchased. in the prvious 12 months or 3 years post.

Question 17

What is qualifying R&D?

Answer 17

Revenue expenditure on:
Staff costs including emp NI and pension contributions but excluding benefits.
If external workers are used only 65% of the amounts paid will qualify.
Consumables and software, including fuel power and water. NOT RENT.

Question 18

What CA are claimed on R&D?

Answer 18

FYA

Question 19

SME can obtain a X

Answer 19

186% deduction for qualifying R&D expenditure.

Question 20

If a SME makes a trading loss it can claim a tax credit resulting in immediate repayment. The credit it:

Answer 20

10% of the lower of:
Unrelieved trading losses (after a deemed current year claim and actual carry back or group reliefs)
186% of qualifying R&D expenditure

Question 21

CG - Companies get

Answer 21

Indexation allowance.

Question 22

The indexation allowance is designed to

Answer 22

give companies relief against inflation over the period of ownershi

Question 23

Indexation was frozen in

Answer 23

December 2017.

Question 24

The indexation allowance cannot

Answer 24

increase or create a loss.

Question 25

Share matching rules in companies

Answer 25

Aquisitions Same day Aquisitions previous 9 days Share pool FA 85 Pool

Question 26

Substantial Shareholdings Exemption

Answer 26

Any gain on the disposal of all or part of a substatial shareholding is exempt and any loss is not allowable. Automatic and you cannot disapply.

Question 27

What are the conditions for SSE?

Answer 27

A shareholding is substantial if: Holds at least 10% of share capital Is entitled to at least 10% of profits Entitled to at least 10% of assets on widning up. Interests of other group companies can be aggregated. Shareholding must have been held for a continuous 12 month period during the 6 years prior to disposal. 12 months can include if the assets were held within a group Company invested in must be a trading company or a holding company of a trading group at the time of disposal.

Question 28

Replacement of business assets - Rollover relief

Answer 28

The only relief available to companies. Indexed gain is deferred. Goodwill is not a qualifying asset. Claim for the relief must be made by the later of 4 years at the end of the accounting period that the old asset is disposed of or new asset purchased.

Question 29

Marginal relief is

Answer 29

(upper limit - augmented profits) x 3/200 x (TTP / Aug Profits) The purpose if to ease the transition from the small profits rate to the main rate of corporation tax.

Question 30

Companies are asscoiated if

Answer 30

They are under common control i.e 50% shareholding. companies that are only assiciated for part of a period are treated as being assiciated for the entire period. Dormant companies do not count. It is irrelevant where the company is resident.

Question 31

A company must notify HMRC of the

Answer 31

beginning of it's accounting period (when it starts to trade) and the beginning of any period that does not immediatly follow the end of a previous accounting period. Must be submitted within 3 months from the relevant date.

Question 32

If a company which is chargeable to tax but has not received a notice to file a tax return

Answer 32

It must give notice of chargeability within 12 months of the end of the accounting period.

Question 33

When is a tax return due?

Answer 33

The Later of: 12 months after the period If the period of account is more than 18 months then 30 months fromt he START of the period of account 3 months from the notice to file

Question 34

Compliance checks

Answer 34

HMRC must give written notice of their intention to conduct a compliance check and must be given by the later of: First anniversary of the due date if done on time. The quarter day following the first anniversary of the actual filing date if the return is filed after the due date. If the company amends the return. The window extends to the quarter day following the first anniversary of the date of amendment.

Question 35

Amendments on return

Answer 35

If the compliance notice falls after the original window and within the extended window due to an amendment, the matetrs of enquiry can only be those relating to the amendment.

Question 36

Companies must keep records for:

Answer 36

The latest of: 6 years from the end of the accounting period The date any compliance checks are completed The date after which compliance checks may not be commenced.

Question 37

Penalties apply for

Answer 37

Late filing - £100. Rising to £200 after 3 months. These become £500 and £1,000 for the third consecutive late filing. Errors Failure to keep records (£3,000).

Question 38

HMRC may correct obvious errors on a return within

Answer 38

9 months of the filing date.

Question 38

Companies that are not large pay their CT

Answer 38

9 months and 1 day after the end of the accounting period

Question 39

A large company is one whose X

Answer 39

Augmented profits exceed £1,500,000

Question 40

The £1,500,000 threshold is reduced in two circumstances

Answer 40

Limit is scaled down for shorter periods Limit is divided by the number of associated companies INCLUDING the company itself at the end of the previous accounting period

Question 41

For 12 month periods 4 quarterly installements are due

Answer 41

in months 7, 10, 13, 16 and due on the 14th of each month. Installments are based on the expected tax liability of the current period.

Question 42

If the company has a shorter period

Answer 42

installments after the first installment are at 3 monthly intervals but the final installment is due on the 14th of the 4th month after the end of the accounting period.

Question 43

How do you calculate interim payments?

Answer 43

3 x (CT/ n)

Question 44

Transitional relief

Answer 44

Available for ocmpanies who become large in a period. No quarterly payments are due if either: Augmented profits are less than 10m The company was not big in the previous year.

Question 45

Companies also do not have to pay by installments if

Answer 45

The prior year CT was less than £10,000 for a 12 month period.

Question 46

CT - under and overpaid tax rates

Answer 46

Underpaid - 6.5% Overpaid - 3%

Question 47

Group payments on arrangements

Answer 47

Where more than one c ompany ina. group is liable to pay by installments one company can be allocated to make the payments on behalf of the group. This is because groups are often unlikely to know the tax liabiltiies until all of the groups accounts have been done.