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BTAX Business Taxation

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Presentation on theme: "BTAX Business Taxation"— Presentation transcript:

1 BTAX Business Taxation
Session 4: Corporation Tax Calculations

2 Process for calculation of Corporation Tax
Step 1: Adjust trading profits to assessable (taxable) profits Step 2: Add together different sources of income to calculate Taxable Total Profits Step 3: Calculate CT liability Step 1, 3 & 4 in earlier weeks CT calculation

3 Taxable Total Profits Trading Profits - Loss relief b/f
+ Income from Property + Interest Income + Chargeable Gains = Total Profits - Loss relief - Gift aid = Taxable Total Profits (TTP) CT calculation

4 Taxable Total Profits How are dividends from UK resident companies treated? Example page 5.5 Basic company Students complete Page 5.1 as far as PCTCT CT calculation

5 Tax rate Tax rate in FY2016 is 20% Questions 4.1 CT calculation

6 Augmented Profit Not relevant to 2016/17

7 Straddling Years What happens when financial year end is not 31 March?
Example Page 5.14: Alpha beta gamma delta CT calculation

8 Trading Losses 3 options: What are they? Page 5.16: Losses: Loser PLC
CT calculation

9 Rental Losses How are these treated? Questions 4.3
Page 5.16: Losses: Loser PLC CT calculation

10 Payment of Corporation Tax
When is this due? CT calculation

11 Payment of Corporation Tax
CT calculation

12 Interest (late payment)
What interest is charged/paid by HMRC? Students attempt 5.4 if time. CT calculation

13 Penalties Errors in returns: as personal tax Failure to keep records
Late return: Question 4.5 Students attempt 5.4 if time. CT calculation

14 CT 600 Will be expected to complete in examination
Hand out sample Walton Ltd CT calculation

15 CT 600 Deadline for adjustments = 4 years from end of tax year (Co. or HMRC) HMRC allowed 6 (20) years where there is careless behaviour (deliberate concealment) Hand out sample Walton Ltd CT calculation

16 Records Specifically include: Financial statements Tax working papers
Tax return copies Purchase invoices Details of non-trade income Non-current asset schedules

17 Homework Tutorial book questions 5.2, 5.5, 5.3, 5.4, 5.1, 5.6
Make notes from chapter 5

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