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CTA (Corporation Tax (Group relief (CG group (degrouping charge (co leaves…

- - - - donations, divs, gains: in the block received
      - property, NTLR: accruals
      - Cap allowances are calced twice and apportioned by m/12
  - - - notify within 3m of start of CAP
      - if an existing company and no CT603 received, must notify HMRC within 12m of end of CAP
      - failure to notify
        
        100 30 50
        70 20 35
        30 (0-10) (10-20)
        
        Also for incorrect returns
    - - later of 12m after CAP or 3m after filing notice
      - filed online with copy of accounts, tagged in ixbrl format
      - if long period, both due at the same time
      - amend within 9m (HMRC) or 12m (Taxpayer)
      - enquire within 12m of filing, or 12m from next quarter if filed late
        (31/1, 30/4, 31/7, 31/10)
      - If late
        
        £100, £10 p/d 90 d, 5%, standard table (12m)
    - - £3,000
      - dont provide on enquiry, £300, and then £60d
  - - - large = AP > £1,500,000
        
        £1,500,000 limit is divided by 51% cos
      - AP = TTP + non 51% sub
        
        51% sub, 51% owned, or 51% subs of same co
      - unless: tax due is <10,000 or not large previous CAP and AP < £10mill
      - due 14th of month 7, 10, 13, 16
        3/n
    - - 5% at filing, 3m, 9m
  - - - interest on prop loans are relieved as ntlr
      - reverse premium is income from property
  - - - profit and loss
      - Loss
        
        total profits that CAP
        
        Total profits previous 12 m
        
        if ceasing trade, 36m
        
        carry forward
        
        time limit to claim is 2 yrs
        
        if loss from CA FYA
        
        can surrender for 19% credit
        
        credit limited to PAYE and NIC for the loss period or £250,000 (larger)
        
        clawed back if sold within 4 yrs
        
        if loss from property
        
        set against total profit
        
        pool overseas profit/loss
        
        carried forward against total profits
        
        NTLR
        
        total profits
        
        carry back 12m against NT profits
        
        carry forward against NT profits
    - - sum and then NTLR
  - - - perform index twice, using cost and 1982 value. For both use index from 1982
    - - depreciating asset
        
        crystallises on sale, cease of use, 10 years
    - - 10%
      - held for 12m out of past 2 years
      - both trading cos
  - - - profit/loss
    - - Non trading inc/expense
      - set against trade profit, or carry forward against future non trading
    - - doesnt apply to goodwill or customer related IFA after 8 July 2015
    - - 12m before or 36m after sale
      - proceeds - (cost-amortisation) = gain
  - - - staff wages, software, clinical trial payments, sub contracted R&D, external workers
    - - lower of R&D at 230% or unrelieved trading losses
      - credit is 14.5%
  - - - agents' commissions, pro fees, premises costs, director salaries
      - exclude capital expenditure
      - excess mgmt expenses can be carried fwd
  - - - share capital
      - profits
      - assets on winding up
      - ignore shareholdings of individuals
    - - apportion the loss to overlapping periods
    - - like '75%' group, but can have subsidiaries, if effective ownership is >50%
      - No gain no loss transfers
      - gains and losses can be moved to other group members
      - rollover relief across the group
      - if an asset added to stock, a gain arises to that company
        can elect to use indexed cost
      - if stock added to fixed asset, profit arises to company that's transferring it
      - can only be a member of one CG group
      - degrouping charge
        
        co leaves within 6 years of receiving an asset
        
        as if sold the asset and repurchased at MV
        
        assessed on the seller
        
        can be eligible for SSE
    - - common control
      - overseas residents
      - ignore dormant
      - ignore individuals
  - - - industrial/building societies
      - crown companies
      - companies controlled by open companies
      - quoted cos in the public interest
        
        on stock exchange
        
        dealings in last 12m
        
        owners <85% votes
        
        public >35% votes
    - - if not exempt, charge
        
        25% or 32.5% post 6 April 2016
        
        exemptions:
        
        ordinary course of business
        
        less than 15000 to fulltime director/ee who has less than 5% entitlement to assets on winding up
      - amount is amount outstanding at end of CAP or normal due date
      - tax can be reclaimed by co once loan repaid
      - no relief if paid back and reborrowed within 30 days (>£5,000), or if >£15,000 and there are arrangements to borrow further
      - writing off loan is non-deductible, like a dividend
  - - - incorporated in uk
      - central management and control in the UK
        
        highest level of control
    - - if permanent establishment in UK, taxable in UK
      - Where permanent establishment in UK, but overseas co, deductions are available for executive/admin expenses (unless financial trader
    - - exemption for SMEs
      - transactions between companies that mean profits moved outside of the UK net
      - tax advantage has arisen
        
        may adjust CT profit
        
        if both subject to UK CT, the party that wasn't advantaged may make a corresponding adjustment
        
        balancing payment from disadvantaged party to advantaged party can be made without tax consequences
      - HMRC can offer advanced pricing agreements so adjustments not needed
    - - non-uk resident but controlled by UK individuals/cos
      - Profits can be apportioned to a UK co, tax credit may be available
      - 5 exemptions
        
        period
        
        territories
        
        low profits
        
        low profit margin
        
        tax
      - 5 gateways
        
        profits for UK activities
        
        non-trading finance profits
        
        trading finance profits
        
        captive insurance
        
        solo consolidation
  - - - income from engagements , less:
        
        allowable expenses
        
        pension
        
        employer's NIC on salary
        
        salary and benefits
        
        Deemed payment
        
        less deemed payment x (13.8/113.8) for ER NIC
        
        this is deductible for CT
  - - - only the original expense on the fixture is treated as an asset for capital allowances
      - fixed value requirement is that the disposal value for seller is the acquisition value for the purchaser
        
        buyer and seller must confirm this between them within 2 years by making an election
      - pooling requirement is that the previous owner must have claimed capital allowances on the fixutres
    - - finance,
        
        depreciate through P&L, no CA, for HE cars 15% is disallowable
      - operating
        
        No CA or depn, rental is allowable expense
      - Hire purchase
        
        depreciation allowable , CA's allowed on the cash price
- - - - trustees taxed on the income the trust generates
      - no personal allowances
      - 20/20/7.5% rates
      - no relief for general trustee mgmt expenses
      - expenses deducted from divs in priority
      - life tenant taxable on all income arising, less trustee expenses (claims deduction for trustee tax paid)
      - income life tenant receives retains character
      - if pre March 2006 - qualifying
        
        assets form part of the life tenant's death estate
        
        assets the lifetenant owns outright are the 'free estate. tax is apportioned across the free estate and the qualifying IIP.
        
        trustees pay tax on the IIP and the remainderman receives thenet
        
        unless set up via settlor's will
      - after march 2006
        
        treated as a CLT
    - - trustees pay tax at 45/45/38.1 rates
      - first £1000 is at basic rate
      - income used for expenses is only taxed at 20/20/7.5 rates
      - Beneficiary treated as receiving net of 45% tax
      - total of tax paid by trustees vs credits for beneficiaries (45%) is maintained so beneficiary cant claim back more tax than has been paid
        
        negative balance is a trustee liability, positive balance is carried forward
    - - 10 year charge
      - use the NRB , less transfers in 7 years before creation and distributions in last 10 years
      - distributions include taxes paid
      - RATE=
        intiial value of trust (less NRB )* 6% % n/40
        
        rate x distribution = exit tax
        
        gross the rate up if the trust is paying
        
        for 10 year charge .charge on value of the trust calculating rate with the current trust value rather than initial trust value
    - - trust for bereaved minor is automatically created on death of child's parents-must give ownership of assets to the B by age 18- no charges apply
      - 18-25 trust can be created by a parent by will - no principle charges, but can be exit ccharges
    - - amounts settled into trust are disposal at market value
      - gains arising can be deferred using gift relief
      - trustees get 50% of AE, so £5,555, divided by the number of trusts, but cant be less than 10% of full AE
      - Entrepreneur's relief
        
        IIP only
        
        shares in trading co
        
        lifetenant holds >5%
        
        worked for the company for >1y before disposal
        
        claimed jointly by anniversary of 31 january in the tax year after disposal
      - giving asset to beneficiary is disposal for CGT
        
        deferred if chargeable for IHT
        
        deferred if business asset
    - - income taxed on settlor at marginal rate
      - if minor children are also included, in this case only income used for the children is taxed on the settlor and accumuilated income in the trust is not (de minimis of £100)
      - no gift relief available
  - - - unless used to buy excluded property/BPR-APR property
        
        in the APR-BPR situation, the loan is deducted from this property
    - - shares
        
        quarter up from the bid price or average of bargains (lower of)
        
        if ex div at death, add the dividend on
      - assets owned jointly (not spouses ) 5-15% discount
    - - received a chargeable transfer in 5 years before death
      - IHT paid on transfer received x QSR year percentage from tables x (increase in estate + IHT paid on the increase)
      - if receiving the assets and not paying the tax yourself - this is a tax free legacy, otherwise it's known as tax bearing
    - - net off profits and losses on sales
      - loss is restricted if the executors buy quoted shares within the period death-2m after last sale
      - land
        
        3y period after death, and account for sales at a loss in y4
        
        the loss is reduced by purchases between death and 4m after final sale in 3y period.
  - - - unless new for old replacement, inherited, two transfers within 2 years of death
  - - - land, market valye rent/ chattels are MV x ORI
      - no charges if total is less than 5k
      - can avoid the charge by making it a gift with reservation
      - no poat if gift was given 7y before use
  - - - CLT
        
        donor IHT100
        
        payment 6m after end of transfer or 30 april next year
        
        if death tax, due 6m from ened o month of death or with IHT return if earlier
      - PET
        
        donee return if chargeable
      - death
        
        executors IHT400
        
        payment in 10 annual instalments
        
        donee of a lifetime transfer if still owns the asset
        
        trustees facing lifetime tax
        
        excecutors for death estate tax
        
        asset must be land/buildings/some shareholdings/a business/partnership share
        
        for shares
        
        donor had control
        
        unquoted and iht on the shares is >20% of total iht due
        
        unquoted >10% holding IHT >£20,000 due
        
        IF APR, share in trading co or business interest, no interest is due
        
        penalties
        
        5%
        
        outstanding at due date of return
        
        outstanding >5m after first penalty
        
        outstanding > 11m after first penalty
        
        for future instalments, first penalty is if outstanding >30d after due date
      - usually due 12m within date of transfer - excutors must submit before probate granted
- - - - Exceptions to basic place of
        supply (B2B - C / B2C - B)
        
        Restaurants/ catering
        
        Passenger transport
        
        Services relating to land
      - MOSS
        
        Electronic/telecoms/broadcasting
        
        customer charged their domestic rate of VAT
        
        VAT is accounted for on a single return
    - - Zero rate
      - show evidence of leaving
    - - No UK supply
      - Buyer pays input VAT
        
        This is a reverse charge
    - - If VAT no: zero rate
      - If no VAT no:
        charge UK VAT
    - - No UK place of supply
      - Buyer pays acquisition VAT
        
        seller zero rates
        
        This is a reverse charge
      - Special tax point: 15th of the month goods arrived
        or date of invoice
    - - despatches: >250,000 and
        acquisitions: >1,500,000
        in a year
      - due 21 of month following month of despatch/acquisition
      - criminal offence not to file
    - - EC Sales List
        
        shows value of supplies to each customer
        
        due 14(21) within end of period
    - - concerns EU supplier to UK customers
    - - Exempt company buying goods from EEA will be charged VAT by each country. Can create advantage. Must register if limit exceeded
      - Post Sch 3 Registration
        
        Like acquisition
  - - - non-monetary
      - Barter
      - Incidental expenses
    - - Prompt payment discount
        
        VAT due on full value,
        credit note later for reduction
      - Multiple supplies:
        apportion to each supply
        charge VAT separately on each item
      - Single supply:
        other elements are incidental
        one VAT liability
      - Time of supply
        
        Goods: delivered,made available, collected
        
        Services: performed
        
        Overriders
        
        Early: payment or tax invoice
        
        Late: invoice within 14 days
        
        Deposits and balance treated separately
        
        Continuous services: earlier of payment or invoice
      - Capital goods scheme
        
        land and buildings, 10 years
        
        £250,000
        
        computers, ships, aircraft, 5 years
        
        £50,000
        
        reclaim based on taxable usage % and adjust yearly depending on actual usage
        
        When sold, 2 adjustments
        
        sale adjustment
        
        if taxable, treat remaining years as 100% taxable usage
        
        if exempt, treat remaining years as 0% taxable usage
        
        normal adjustment, for the year of sale
    - - Tips
      - Salaries
      - Supplies outside UK
      - TOGC
        
        TOGC
        
        Land and buildings not covered
        unless seller opted to tax
        
        If no option to tax is exercised
        
        Standard rate, for new
        commercial freehold L&B
        
        No consecutive transfers
        
        No significant break in trading
        
        Buyer is VAT reg, or will become so by the transaction
        
        Seller is VAT reg
        
        Same kind of business carried on
    - - food
      - water
      - books
      - transport
      - bank notes
    - - Land
      - Insurance
      - Education
      - Burial
      - Healthcare
    - - E.g. a gift
      - Output VAT due to HMRC
      - Fuel
        
        Recover no input tax
        
        Use fuel scale charges
        
        Keep accurate records - amount supplied
        to employee is deemed supply
      - On ceasing trade - VAT due on goods
        held at replacement value unless total tax <£1,000
      - construction services by builders to themselves
        '>£100,000- if exempt or partially exempt
      - Cars taken and used by owners
  - - - VAT invoices
        
        Less detailed invoice
        
        VAT payable and the rate
        
        Cant be used if:
        
        Supply to another member state
        
        value > £250
        
        Description of goods
        
        Time of supply
        
        Name and address of retailer
      - accounting records
      - credit + debit notes
      - VAT account
      - Keep for 6 years
    - - Taxable supplies <£83,000
      - Voluntarily
      - Deregister if taxable supplies
        <£81,000 in next 12m - this can
        exempt from historic test
      - Foreign businesses making any
        taxable supply in the UK must register
      - If only zero rated, can request exemption
      - Pre-registration
        
        can reclaim VAT on goods held at reg,
        bought up to 4yrs previously
        
        Reclaim VAT on services in last 6m
    - - Pay and file: 1m 7d from end of the period
      - Stagger groups:
        30 June
        31 July
        31 August
      - Quarterly
    - - May degregister if taxable supplies in next 12m
        <£81,000
      - Compulsory deregistration if business old/ ceases trade
      - Goods at hand at deregistration are accounted for
        on final VAT return unless <£1,000
    - - Annual
        
        Single VAT return at end of year
        balance paid with return 2m after VAT year
        
        90% of estimated VAT (last year's or HMRC guess) due paid 10% months 4-12
        
        or 25% in months 4,7, 10
        
        Taxable supplies <£1.35m in next 12m
        
        Turnover <£1.60m p/a
      - Cash
        
        ignore basic tax point, reclaim input tax when paid, pay output tax when received
        
        No Vat offences committed in last year
        
        no penalties in 12m
        
        All returns up to date
        
        Turnover in next 12m is over 1.35m must leave and if 1.6m in last 12m
    - - Ask HMRC to review or appeal direct to
        First tier tribunal
        
        First tier tribunal can give permission to appeal to the upper tribunal
        must be on a point of law
        
        upper tribunal can give permission to appeal to CA or SC
      - Appeal must be made within 30 days
    - - Incorrect returns:
        
        careless can be suspended 2 years
        
        30 - 0 - 15
        70 - 20 - 35
        100 - 30 - 50
      - Failure to notify
        
        30 - (0 - 10 if <12m) - (10 - 20 if <12m)
        70 - 20 - 35
        100 - 30 - 50
      - Due within 30 days
      - Default surcharge
        
        Late VAT return or late payment
        
        First default, surcharge period starts
        
        surcharge period lasts 12m
        
        default in surcharge period:
        2%, 5%, 10%, 15%
        
        £400 de minimis, unless 10-15%
        
        For 10-15%, £30 minimum charge
        
        No charge if a nil or repayment return
        
        Payment deadline can be extended 7d if paying electronically
        and filing online
      - Failure to register
        
        backdated to when should have registered
        
        30 - (0 - 10 if <12m) - (10 - 20 if <12m)
        70 - 20 - 35
        100 - 30 - 50
    - - corporates
      - UK based
      - under common control (>50%)
      - single return
      - supplies between the group are disregarded
      - Pros
        
        simplifies accounting
        
        centralises admin
        
        supplies disregarded
        
        exempt cos can register for VAT
      - Cons
        
        one exempt co makes the whole group partially exempt
        
        difficult to gather the info needed for the single return
        
        joint and several liability for VAT
        
        VAT thresholds affect the whole group
        
        penalties based on group figures
  - - - Taxable/Total supplies
        Round up
        x Residual input tax
      - Or, use last year's percentage and true up in final adjustment:
        last return this year
        first return next year
    - - Recover all exempt VAT below a threshold
        
        Test1
        
        Total input tax <£625 p/m
        
        Exempt <50% of Total supplies
        
        Test2
        
        Total input tax - taxable supplies input tax = <£625 p/m
        
        Exempt <50% of Total supplies
        
        Normal Test
        
        Total exempt input tax+ portion of residual supplies is <£625 p/m
        And: <50% of input tax
        
        If test is passed last year - can apply the
        de minimis test annually rather than quarterly
    - - taxable turnover in next year <150,000
      - leave if taxable turnover >230,000
        
        unless 1 off transaction and next year under £191,500
        
        must leave if income >230,000 in next 90 days
      - turnover x percentage = VAT due to HMRC
      - 1% reduction in first year
      - input tax not deductible, unless
        
        capital asset
        
        pre-registration input tax
      - Farmers
        
        instead of VAT registering, can join flat rate scheme
        
        charge 4% vat, and keep it
        
        registered customers reclaim the vat
        
        farmer cannot recover any input vat
        
        must be designated activities, if non-designated >83,000 pa must reg for VAT
    - - start with gross daily takings
        
        Point of sale
        
        everything at same rate of VAT, so no apportionment needed, or tills automatically distinguish between the rates
        
        Apportionment scheme 1
        
        Sales excluding VAT are <1,000,000
        
        Quarterly calculation
        
        (cost of SR goods inc vat)/(cost of all goods inc vat) * gross takings = SR sales
        
        Apportionment Scheme 2
        
        VAT exclusive sales <£130m
        
        (ESP SR goods inc vat)/(ESP all goods inc VAT) *GDT = SR sales
        
        Direct calculations scheme 1
        
        turnover <£1m
        
        if ZR purchases minority
        
        GDT (inc vat) - ESP of ZR purchases * 1/6 = output vat
        
        if SR purchases minority
        
        ESP of SR purchases * 1/6 = output vat
        
        Direct calculation scheme 2
        
        use direct calculation scheme 1
        
        turnover <£130m
        
        Do an annual adjustment, for stock:
        add opening stock to purchases and deduct closing stock
  - - - First major interest
        
        free hold
        
        lease >21 years
      - correct type
        
        dwelling, residential, charitable
        
        building materials and qualifying services can be zero rated
        
        construction services must be supplied to the user
        
        If converted from commercial to residential, may zero rate if first major interest
        (also applies to renovations and alterations)
        
        Building materials are standard rated
        services: 5% rate
    - - licence: e.g. holiday accomodation, parking, theatre/sports, fishing
      - if opted to tax
        
        must opt within 6m
        
        lapses if 6 years pass
        
        can be revoked within 20 years
        , but must repay input tax reclaimed
        
        notify HMRC within 30 days
  - - - taken place
      - supply made to taxable person
      - business purposes
        
        Part business purposes can be apportioned
        or Lennartz
      - direct and immediate link with a taxable transaction
      - Blocked
        
        business entertaining
        
        cars
    - - Goods/services supplied
      - VAT accounted for
      - written off in accounts
      - 6m have passed
      - claim within 4m 6m from supply or payment due
      - supply at OMV
      - Do not have to notify debtor
      - debtor has obligation to pay input tax to
        HMRC after 6m have passed
- - - - gift
      - transfer to trust
      - transfer on marriage
      - transfer on divorce
      - units in ETF
      - repurchase of own shares
  - - - exemption if transfer of an undertaking to restructure a target company
      - 0.5% for acquiring whole or part of another company's undertaking (for reorganisation)