Corporation Tax

Question 1

Accounting period

Answer 1

• the period corp tax is charged
• never more than 12 months; if more then split into two periods
• period dependant on when company prepares accounts

Question 2

period of accounts

Answer 2

period a company prepares a set of accounts

Question 3

events ending an accounting period

Answer 3

• 12 months from beginning of period
• company ceases trade
• company not within charge of corp tax
• company starts or ceases to be uk resident
• company enters administration

Question 4

adjusting trading income for long periods
1. capital allowances and balancing charges
2. property income
3. capital gains
4. interest received
5. charitable donations

Answer 4

• adjust and allocate for time apportionment
• CAs and balancing charges then calculated separately for each period
• property income is time apportioned
• Capital gains assessed in the year of disposal
• interest received allocated on accrual basis
• charitable donations on date paid

Question 5

Trading income for companies

Answer 5

• similar to sole traders
• no private use expenses
• apportions of profits consist of dividends and transfer to reserve
• gift aid disallowed
• special tax relief for R&D is available

Question 6

Capital allowances

Answer 6

• one per period
• WDAs scaled down for period less than one year
• only claim one AIA

Question 7

CAs FYA 1st April 2021 - 31 March 2023

Answer 7

• main rate pool could claim 130%
• special rate could claim 50%
• disposal of asset could give rise to balancing charge

Question 8

CAs FYA from 1 April 2023 onwards

Answer 8

• FYA of 100% on main rate pool
• 50% on SRP
• balancing charge of SRP on disposal is 50% of disposal proceeds