Tax

Question 1

Who is subject to corporation tax?

Answer 1

Companies e.g., public limited companies (Plc) and Private limited companies (Ltd).
Not Partnerships.

Question 2

What is corporation tax paid on?

Answer 2

Income profits (profits generated by trade).
Chargeable gains (profits generated by asset sales).

Question 3

When is the tax year for a corporation?

Answer 3

1 April to 31 March.
Tax must be paid within 9 months after the end of the period.

Question 4

How does a partnership pay tax?

Answer 4

Does not pay corporation tax.
A partner’s profit share is added to their own personal tax income on which they pay income tax.
Sales of assets in a partnership business are subject to capital gains tax.

Question 5

What is VAT?

Answer 5

Value Added Tax

Question 6

When is VAT payable?

Answer 6

Taxable supply of goods and/or services by a taxable person in the course of furthering their business.

Question 7

What is the standard rate of VAT?

Answer 7

20%

Question 8

When is VAT registration compulsory?

Answer 8

When the turnover in any 12 month period is at or above the VAT registration threshold.

Question 9

What is input tax for VAT?

Answer 9

VAT a VAT-registered business pays on the goods and services it buys.
Can be reclaimed.

Question 10

What is output tax for VAT?

Answer 10

What a VAT-registered business charges on the goods and services it sells.

Question 11

What is a VAT registered business required to do?

Answer 11

Complete a quarterly VAT return, by deducting input tax from the output tax and paying the balance due.