TEMPLATE FOR CORPORATION TAX CALCULATIONS
Company’s income profits (along with capital) charged to corporation tax
Partnership = only charged corp tax where it is corporate partners (PAGE 347 TB)
STEP 1: CALCULATE INCOME PROFITS
Add up Income from various sources: PAGE 358 TB
Land
Investments
Trading Income:
Chargeable receipts
Less
Deductible expenditure
Less
Capital allowances – existing pools at 18% and AIA on first million is taken off
= Trading profit (or loss)
STEP 2: CALCULATE CHARGEABLE GAINS – one off sale
Stage 1: Identify the chargeable disposal
- Likely to include land, shares in other companies.
Stage 2: Calculate the gain or loss – name the gain as pre indexation gain (inflation). Apply indexation factor to
the old figure – look in the facts. (factor x old figure = index allowance) deduct that. It should be smaller – it is a
helping hand from gov to deduct the inflation amount and pay less corp tax. (page 360)
- Proceeds of disposal
- Less
- Cost of disposal = net proceeds of disposal
- That figure LESS
- Other allowable expenditure = gain before indexation or loss
- That figure LESS
- Indexation allowance = times the initial and subsequent expenditure by the indexation factor that covers
the period from date expenditure incurred to date of disposal
Stage 3: Apply any reliefs – PAGE 361 TB
Stage 4: Aggregate remaining gains/losses
STEP 3: CALCULATE TOTAL PROFITS (i.e. add together income profits and gains) then APPLY RELIEFS
AVAILABLE AGAINST TOTAL PROFITS
Main examples: PAGE 365 TB
Carry-across/carry-back relief for a trading loss
Terminal carry-back relief for a trading loss
Qualifying donations to charity
STEP 4 CALCULATE THE TAX AT THE APPROPRIATE RATE
Rate of Tax = 19%
Company’s income profits (along with capital) charged to corporation tax
Partnership = only charged corp tax where it is corporate partners (PAGE 347 TB)
STEP 1: CALCULATE INCOME PROFITS
Add up Income from various sources: PAGE 358 TB
Land
Investments
Trading Income:
Chargeable receipts
Less
Deductible expenditure
Less
Capital allowances – existing pools at 18% and AIA on first million is taken off
= Trading profit (or loss)
STEP 2: CALCULATE CHARGEABLE GAINS – one off sale
Stage 1: Identify the chargeable disposal
- Likely to include land, shares in other companies.
Stage 2: Calculate the gain or loss – name the gain as pre indexation gain (inflation). Apply indexation factor to
the old figure – look in the facts. (factor x old figure = index allowance) deduct that. It should be smaller – it is a
helping hand from gov to deduct the inflation amount and pay less corp tax. (page 360)
- Proceeds of disposal
- Less
- Cost of disposal = net proceeds of disposal
- That figure LESS
- Other allowable expenditure = gain before indexation or loss
- That figure LESS
- Indexation allowance = times the initial and subsequent expenditure by the indexation factor that covers
the period from date expenditure incurred to date of disposal
Stage 3: Apply any reliefs – PAGE 361 TB
Stage 4: Aggregate remaining gains/losses
STEP 3: CALCULATE TOTAL PROFITS (i.e. add together income profits and gains) then APPLY RELIEFS
AVAILABLE AGAINST TOTAL PROFITS
Main examples: PAGE 365 TB
Carry-across/carry-back relief for a trading loss
Terminal carry-back relief for a trading loss
Qualifying donations to charity
STEP 4 CALCULATE THE TAX AT THE APPROPRIATE RATE
Rate of Tax = 19%
