The following Corporation Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
This guidance note considers the accounting rules governing loan relationships and the tax law applicable if a company departs from those rules.
The basic measure of the profits of a company chargeable to corporation tax in the UK is the profit before tax (PBT) figure as reported in its statutory accounts. Consequently, the tax return of a UK company is generally completed by taking the PBT for the financial period as reported for accounting purposes and making adjustments to that figure only to the extent expressly required by UK tax law. The accounting treatment of any transaction is therefore fundamental to its tax treatment. Understanding the basic accounting treatment of an item and its acceptability for tax purposes is a crucial part of preparing a tax computation.
For further information on the rules governing the computation of profits for corporation tax purposes and the required adjustments to accounting profits, see the Adjustment of profits ― overview guidance note.
UK companies are required to follow both commercial law and ‘generally accepted accounting practice’ (GAAP) when preparing their financial statements. UK GAAP is regulated by the Financial Reporting Council (FRC) using a series of technical statements called ‘Accounting Standards’. The Accounting Standards have the force of law, cover a broad range of topics, and are regularly refined and updated.
UK GAAP has historically been developed and published wholly in the UK, albeit with regard to the evolution of practice in other territories, especially the US. However, in recent years there has been a drive to achieve more harmonious methods of accounting throughout the developed economies to better reflect global trade and enable effective comparison between business entities in different territories.
In 2005, the UK added EU adopted International Financial Reporting Standards (IFRS) as an acceptable alternative to the body of UK-produced standards. Under EU law it became compulsory for all EU listed companies to follow IFRS with effect from 1 January 2006 when preparing consolidated financial statements. From 1
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Normal due dateIndividuals are required to pay any outstanding income tax and Class 4 National Insurance, Class 2 National Insurance, and capital gains tax due for the tax year by 31 January following the end of the tax year (ie 31 January 2021 for the 2019/20 tax year). From 6 April 2020, UK
The majority of state benefits (also called social security benefits) are managed by the Department of Work and Pensions (DWP) via the Jobcentre Plus.Some benefits are dependent on a national insurance contribution record (and different classes of national insurance provide different benefit
This guidance note provides an overview of the steps businesses need to take if aspects of their business change, and as a result, they need to notify HMRC about the change.Changes to name and / or addressIf a business changes its name and / or its address then it is required to notify HMRC of the
Class 1 and Class 1AClass 1 and Class 1A are the categories of NIC that can be charged on expenses reimbursed and benefits provided to employees. These classes are mutually exclusive. A benefit cannot be subject to both Class 1 and Class 1A NIC. Three requirements must be met before Class 1A NIC is
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