Lecture 7- Corporation tax

Corporation tax- Tax levied on of & associations such as clubs & political associations but not . It is paid by all bodies & there are no special rules for opening & closing years (always taxed on basis)

Accounting period- Period for which is charged. It starts firstly when company starts to & can also start immediately after of last accounting period. Accounting period ceases at latest months from beginning of accounting period & also cease at end of . In addition, it can cease at of winding up, ceases to be & ceases to be to corporation tax

Period of account- Period for which company makes up

If there is period of account greater than months, accounting period needs to be split into months & of

Profit allocation to accounting periods (for long periods of account) are trading profits (), capital allowances ( for accounting period), property & miscellaneous income (), net credit on non-trading loan relationships (), other income or chargeable gains (when ), qualifying charitable donations (when ) & dividends (when )

Income from non-trading loan relationships- Net received by company but also includes all other & in respect of non-trading loan relationships. It is taxed on basis & consists of all bank & building society & received from other companies. It is net credit so total less

For non-trading items if > it is income from loan relationships. This is part of profits. If > , deduct from income to arrive at chargeable profits ( profits). It is usually calculated on basis

Property income (i.e. rental income) follows basis as that for an individual. Capital allowances are , but interest on loans is not to arrive at property income. It is that is treated with other . Losses can be set off against other of same accounting period & carried forward to set against total profits of future accounting periods

Dividends received by UK from another UK are not but they may affect of corporation tax

Qualifying charitable donations is treated as normal expense. This would include donations to local charities. In calculating adjusted trading profits you need to back what has been in accounts (which would have been calculated on basis), but amount that is deducted to arrive at total taxable profit is on basis

Chargeable gains have to be included in profit for company. Company's chargeable gains are liable to tax. They are computed in similar way to those of individuals, but there are few differences. One is that companies can claim . Amount to be included in profit is total of all separate during chargeable accounting period, less all (net loss would be carried forward & set against future net gains)

Exemptions that apply to companies include motor , non-current assets () sold for less than , “” (unless capital allowances claimed on them), securities & qualifying

Exemptions that do not apply to companies include &

Aim of indexation allowance was to part of gain due to . This was frozen from , so still partly applies to companies. relief will apply now from date of purchase/incurred up to . It has to be calculated for each item of expenditure. It is calculated by applying change in index

Indexation factor is calculated as: (RPI less RPI ) divided by RPI

Restrictions to indexation are that it is frozen from , if retail price index goes (between purchase & sale) there is no /no , there is no indexation allowance on of & finally, indexation allowance cannot convert into , or increase

Corporation tax is chargeable according to . is from 1st April 2020 to 31st March 2021. Corporation tax rates are usually set for financial year by in advance. Then, if necessary allocate profit to appropriate & will be taxed at that apply for those years. Profits are allocated on basis

Corporation tax must be paid since 1/4/11. Date of payment of corporation tax for small & medium sized companies is after end of accounting period. Large companies pay by

Large company (for this purpose) is one with augmented profits of over . Very large company (for this purpose) is one with augmented profits of over . Augmented profits are profits plus any received. However, dividends from companies which are are ignored. In working out applicable augmented profits, profits are by number of companies in group. If accounting period is than 12 months, limit is accordingly. Basis of instalments is based on company's own of current year profits. Interest would be charged if there are any & paid if there are any

Payment dates for large company is in instalments which are paid on day of month of year, day of month of year, day of month of next year & finally, on day of month of year. They are paid on intervals

Payment dates for very large company is in instalments which are paid on day of month of year, day of month of year, day of month of year & finally, on day of month of year. They are paid on intervals

Companies have to do . HMRC issues notice () to company to do corporation tax return. Corporation tax return () has to be submitted to due later of months after end of accounting period, months end of in which accounting period falls or months after Inspector issues notice. It must be completed

Interest on unpaid corporation tax runs from to . Interest on overpaid corporation tax runs from / to . Amounts paid/received on under/over paid corporation tax are treated as part of relationship so it will be net debit/net credit for

Penalties can apply if or are filed late. There can also be penalties for not notifying of company's to corporation tax or for of incorrect corporation tax return & for failure to keep