Commentary

20.1 Rates of tax and basis of assessment

BUSINESSES vol 4(2) start-up, sale and purchase
| Commentary

20.1 Rates of tax and basis of assessment

| Commentary

20 Limited company

20.1 Rates of tax and basis of assessment

The taxation of company trade profits is considerably simpler than the taxation of those of a sole trade or a partnership. This is because a company is taxed on the profits arising in its accounting period rather than by reference to the tax year. Consequently, there are no opening or closing year rules1 and thus far fewer occasions for the apportionment of profits.

A company is charged to corporation tax on all its profits wherever arising2. A company’s income is computed chiefly under the various parts of the Corporation Tax Act

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