Corporation tax Flashcards
Corporation tax computation
Paid by UK resident companies on their worldwide profits (incorporated in the UK or has its centre of management and control in the UK)
One corporation tax computation prepared for each accounting period
Long periods of account
Trading income - adjust profits then time apportion
Capital allowances - two separate calculations for each accounting period
Property and loans - split on accruals basis
Chargeable gains - allocated to the period in which the gain arises
Qualifying charitable donations - allocate to the period in which they are paid
Small companies
Pay corporation tax nine months and one day after the end of their accounting period
Large companies
Make quarterly instalments on the 14th of months 7, 10, 13 and 16 of the period
Augmented profits > £1.5 million (time apportioned and divided by number of associated companies at the end of the prior period)
Not large if liability less than £10k / not large in the preceding 12 months and has augmented profits under £10m
Very large companies
Make quarterly instalments on the 14th of months 3, 6, 9, 12 of the period
Augmented profits > £20m (time apportioned and divided by number of associated companies at the end of the prior period)
Not very large if liability under £10k
For short accounting periods, each instalment is the lower of…
3 x (expected corporation tax liability / months in accounting period)
Remaining corporation tax due in the accounting period
Timing of instalment payments for short accounting periods for large companies
1st instalment - 14th of month seven
Subsequent instalments - three month intervals
Balancing payment - 14th of fourth month after accounting period
Timing of instalment payments for short accounting periods for very large companies
1st instalment - 14th of month three
Subsequent instalments - three month intervals
Balancing payment - 14th of final month of accounting period
