PCCT Flashcards
Adjustment required for trading profit or PCCT?
Dividends receivable
Dividend are not chargeable to CT, so isn’t added to trading income. Removed entirely.
Find GAAP Net Profit > Adjustment Trading Profit > Include other pools > PCCT > work out corporation tax at 19%
Adjustment required for trading profit or PCCT?
Bank interest receivable
Addback as non-trade
This is an NTLR so considered about adjusting trading profit. Pooled together in NTLR
Find GAAP Net Profit > Adjustment Trading Profit > Include other pools > PCCT
Adjustment required for trading profit or PCCT?
Building Society interest
Addback as non-trade UNLESS they are a Bank or Loan shark
This is an NTLR so considered about adjusting trading profit. Pooled together in NTLR
Find GAAP Net Profit > Adjustment Trading Profit > Include other pools > PCCT
Adjustment required for trading profit or PCCT?
Profit on sale of investment
Addback as Capital/Chargeable Gains.
Added back in following adjusting Trade Profit. To be considered in finding PCCT
Find GAAP Net Profit > Adjustment Trading Profit > Include other pools > PCCT
Adjustment required for trading profit or PCCT?
Legal expenses not wholly and exclusively
expenses for GAAP but not for Tax as not wholly and exclusively. Addback
Find GAAP Net Profit > Adjustment Trading Profit > Include other pools > PCCT
Adjustment required for trading profit or PCCT?
Overdraft interest
This is trade so leave in
Find GAAP Net Profit > Adjustment Trading Profit > Include other pools > PCCT
Adjustment required for trading profit or PCCT?
Depreciation
This is GAAP, not tax. Addback.
Consider capital allowance later on.
Find GAAP Net Profit > Adjustment Trading Profit > Include other pools > PCCT
Adjustment required for trading profit or PCCT?
Debenture interest
debenture is similar to bonds/investments.
This may be an NTLR
CHECK IF CORRECT
Find GAAP Net Profit > Adjustment Trading Profit > Include other pools > PCCT
Adjustment required for trading profit or PCCT?
Charitable donations
Not trade. Remove BUT if it is an actual charity then this can be added back in when lookin at PCCT
Find GAAP Net Profit > Adjustment Trading Profit > Include other pools > PCCT
Adjustment required for trading profit or PCCT?
Overdraft interest
This is trade related. No adjustment needed
Find GAAP Net Profit > Adjustment Trading Profit > Include other pools > PCCT
Adjustment required for trading profit or PCCT?
Capital Allowances
Is this trade related? Then yes this is fine. If not trade,
Find GAAP Net Profit > Adjustment Trading Profit > Include other pools > PCCT
Adjustment required for trading profit or PCCT?
Balancing Charge
A balancing charge is the tax liability that arises when you sell an asset for more than its recorded tax value after claiming Capital Allowances.
A balancing charge is treated as income of the business so we need to add this
Find GAAP Net Profit > Adjustment Trading Profit > Include other pools > PCCT
Adjustment required for trading profit or PCCT?
Investment Income
This might be an umbrella term for bank interest etc. Addback.
Bank interest will be pooled into NTLR
Find GAAP Net Profit > Adjustment Trading Profit > Include other pools > PCCT
Adjustment required for trading profit or PCCT?
Directors Renumeration
Leave in as not PCCT. UNLESS not paid within 9 months after the APE then it will be added back and considered in next return
Find GAAP Net Profit > Adjustment Trading Profit > Include other pools > PCCT
Adjustment required for trading profit or PCCT?
If any income tax has been paid, is this added back?
Yes. Added back at PCCT so as not to double tax
