Tax admin for corporations

Question 1

What is the rate of corporation tax?

Answer 1

..19%

Question 2

What is the fine for not keeping records and how long must you keep it for?

Answer 2

..£3000

6 Years

Question 3

When must you pay tax by for small companies?

Answer 3

9 months + 1 days after the end of CAP

Question 4

When must you pay tax by for LARGE companies?

Answer 4

In quarterly instalments (CY tax liability/4) on the 14th day of the following months;

14th day of the 7th month- During CAP
14th day of the 10th month- During CAP
14th day of the 13th month
14th day of the 16th month

Question 5

What is the limit of augmented profit to know if a company is a large company?

and what are the exceptions?

Answer 5

1.5million

Exceptions to the rule….
A company is not required to pay instalments if the following has occurred
✓ The company is paying the POA but the CT liability is less than £10,000
✓ The company has become main rate in the year, but wasn’t paying main rate last year and augmented profits for the year do not exceed £10 million ( Divided by number of 51% group)

Question 6

What is the consequence for late payment?

Answer 6

▪ Interest;
- 3.25% per annum (Date the tax was due up to the payment date)

▪ Penalty;
- > 1 month = 5% tax due
- >6 months= +5%
> 12 months= +5%

Question 7

What is the consequence for late filing?

Answer 7

£100, for failure to submit return
£200 if the delay exceeds 3 months
10% of the unpaid tax if after 6 months
20% of the unpaid tax if after 12 months

Question 8

What is the filing date?

Answer 8

12months after the end of period of account

Question 9

What is the formula of augmented profit?

Answer 9

TTP + Dividends received

Question 10

Which groups are included in the 51% group for an accounting period and how is this determined??

Specifically which companies are excluded and which are included?

Answer 10

The number of 51% group is determined at the of end of the previous accounting period

Dormant companies are excluded but overseas companies are included

Question 11

Can HMRC Correct your obvious mistakes and within how long?

Answer 11

Yes and 9 months from the date the return is filed

Question 12

How long can a company amend their errors?

Answer 12

within 12months of the filing date

Question 13

How long does a company have to make a claim for over payment relief?

Answer 13

Within 4 years from the end of the relevant accounting period?

Question 14

What are the conditions for Companies to be treated as resident in the UK

Answer 14

Incorporated in the uk + Central management in UK
Incorporated overseas + central management in UK
Incorporated overseas + central management overseas

Question 15

How many years of pre trading expenses are allowed?

Answer 15

Cost incurred 7 years before the commencement of trade are allowed. Normal expense allowed under normal CT is allowed e.g. donation

Question 16

What can overseas companies do?

Answer 16

Overseas company can be part of the loss group structure but it cannot itself claim or surrender losses. However if it owns another UK company, the the parent company can use that company i.e. losses can be surrendered by that sub

Question 17

If a period of account is split into two accounting periods, what is the filing date

Answer 17

There will be

• > Two separate pay days i.e. 9 months after end of accounting period
• > Buy only one file date for the returns i.e. 12 months after end of long period of account

***If a period of account is split into two accounting periods, the related corporation tax return must be submitted within 12m of the end of the period of account- NOT THE END of the accounting period. E.g. B Starts trading on 1st June 2019 and prepares 15m period to 31 August 2020. The Corporation tax return date is 31 August 2021

Question 18

When a company is large for the first time, when do they begin paying in instalments

Answer 18

Large companies are required to pay corporation tax in instalments from the accounting period FOLLOWING the first accounting period in which they are considered a large company

Question 19

If a company with corporation tax assessment of 10m want to aappeal this, who is this to be heard by?

Answer 19

Complex cases and large tax sum liability then it goes straight to upper tribunal.