CT silly mistakes

Question 1

MP Enhanced capital allowances - (01 April 21 - 31 March 23)

Answer 1

130% FYA for ANY NEW MP assets NOT cars

Question 2

SRP Enhanced capital allowances

Answer 2

Integral features / Long-life assets
Get AIA or 50% SRP allowance

Question 3

QCDs

Answer 3

Deduct on PAID basis

Question 4

Indexation with multiple elements (e.g. Enhancement expenditure)

Answer 4

Proceeds
Less Cost
Less enhancement
Unindexed gain

x2 Indexation calculations - treat as 2 separate buildings

Question 5

Rollover relief (RoR)

Answer 5

GAIN is restricted to proceeds NOT reinvested

RoR = balancing figure

Question 6

R&D expenditure - Large company

Answer 6

1) Deduct qualifying R&D expenditure
2) Add back RDEC @13% in trading income
3) Deduct RDEC from CT liability at base

Question 7

R&D expenditure - SME

Answer 7

Get EXTRA 130% relief on qualifying R&D expenditure
Salaries of staff directly attributable, software, fuel, water, power, payments to subcontractors (note 65% restriction)

New P&M doesn’t get R&D deduction - gets 130% deduction for CA’s

Question 8

Trading income disallowable expenditure

Answer 8

Loss on disposal of NCA
Amortisation of goodwill ONLY
Cap ex
Non-trade interest expense
W/o of non-trade debt
Client entertaining
Gifts (unless < £50, advertise business, not food/drink)
Gift aid donations
Non-trade subscriptions
Fines (unless parking fine for ee)
Legal fees for capital items (unless registering patent or renewing short term lease)
15% * lease car payments (BU% irrelevant)
Accrued pension contributions

Question 9

SSE

Answer 9

Owns 10% + of shares for 12 months in past 6 years
TRADING company

Question 10

Calculating CT due - Short AP

Answer 10

1st installment = 3 * CT / no. of months
Due 14th of 7th month, each installment 3 months later
Last one due by 14th of 4th month after end of AP

Question 11

CT due dates / admin

Answer 11

pg 178 Hardman’s

Question 12

NTLR

Answer 12

Non-trade interest income
e.g. ANY interest income unless a bank
LESS
Non-trade interest expense
e.g. interest on loan to buy shares, mortgage costs relating to leasing of building, underpaid CT

Trade loans = Overdraft, Loan to buy P&M

Question 13

Deductions allowance

Answer 13

Relief on b/f income and losses:
MAX £5 m + 50% of excess total profit in CY over £5m

Question 14

SBA - Any time you see buildings in CT Q4

Answer 14

Given on the construction of buildings from when used in trade
3% p.a
DEDUCT cost of land

Question 15

Disposals in CA comp

Answer 15

At lower of cost and proceeds
Subtotal then calculate WDA on subtotal

Question 16

RoR on asset not 100% used in trade

Answer 16

e.g. building with 85% taxable use and full reinvestment of proceeds

Chargeable gain = % not used in trade

Question 17

Enhanced CA Disposals

Answer 17

Qualifying disposals need a balancing charge of 1.3x lower of disposal proceeds and cost

Question 18

Loss relief (CY/PY/cfwd

Answer 18

Goes after total profits but above TTP