Corporation tax Flashcards
CT rate
19% FY17-FY22
FY23 onwards (after 1 April) Main 25%, Small 19%, Marginal relief fraction 3/200, marginal effective rate 26.5%
50k and 250k divided by assoc cos
marginal relief calc - 3/200 x (U-A) x N/A
U upper limit £250k/assoc
A aug profits (TTP + non group div income)
N companys TTP
26.5% marginal relief - applicable when thinbkinbg of cfwd losses to future period where marg ratre applies
Close investment holding companies
Small companies and marginal relief do not apply where it is a close inv holding co
25% rate irregardles of profits
CICH = close company whos main activities are NOT :
trading
Letting land to un connected 3rd parties
Holding co of trading or letting group
Dividends received
divs from small cos
small co?
divs from not small cos - exemptions
All divs whether received from UK or OSeas cos are subject to same rules
Almost all divs from UK cos are exempt
Divs received from smaller companies exempt if:
- Received from UK co or a company in qualifying territory
- Paid out of chargeable profits which have been subject to a CFC apportionment
AND
- In either case not part of scheme to get tax advantage
Small co = less than 50 emps, and either annual turnover not over 10m euros or BS total not over 10m euros
Divs received by not small cos exempt if one of following applies:
- Rec’d from company controlled by recipient
- Related to non redeemable ord shares
- Rec’d from portfolio holding (less than 10%)
- Related to trasnaction not designed to reduce UK tax
or
-Related to shares accounted for as liabilities which are not held for unallowable purpose
exempt divs included in exempt ABGH distribs in arriving at aug profit unless received from 51% co
R&D
quali expenditure
merged scheme applies from
external workers and subcontracted expenditure
quali exp:
quali rev exp
staff directly involved in R&D
external staff provider
consumables
computer software
power, water fuel
AP’s starting after 1 April 24 = merged scheme RDEC credit
external workers and subcontracted expenditure :
if co subcontracts to (or hires workers from) Unconnected party = 65% payments qualify
Subcontracts to or hires workers from connected company = quali amount lower of:
- Providers expenditure
- company’s payment to provider
paying co can elect for provider to be treated as connected
if SME has work contracted to them by large company (or someone not quali for SME) the SME can only claim large co relief
SME must carry out work itself or be undertaken by a university individual who would not qualify in own right