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Corporation tax query

I am a part qualified ACCA student studying Taxation F6 and am struggling to understand the following question, I'm sure its very simple but after reading the book and notes I still cant figure this out. I have tried to answer the questions but need the reasoning behind the answers to help me remember. Thanks

Identify the corporation tax accounting periods relating to the following periods of account??

A. A Ltd prepares accounts for the yr to 31 Dec 2010

B. B Ltd prepares accounts for the six months to 31 Oct 2010

C. C Ltd prepares accounts for the sixteen months to 31 Dec 2010

D. D Ltd is incorporated on 1st April 2009 remaining dormant until trading on 1st Oct 2009. It then makes accounts up to 30th Sept 2010

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04th Oct 2010 11:30

Here goes
An Accounting Period (AP) for Corporation Tax starts at either the first day after the end of the previous AP or from the first day the entity comes within the Corporation Tax regime.

It comes to an end either after 12 months or the end of its period of accounts if shorter.
An AP cannot exceed 12 months.

Your questions answers are:

A.    12 months to 31 Dec 2010 – 12 months from the end of the previous AP
B.    6 months to 31 Oct 2010 – from end of previous AP to the accounting date not exceeding 12 months
C.    There are two AP because an AP cannot exceed 12 months
       a.    12 months to 31 August 2010 – 12 months from end of previous AP
       b.    4 months to 31 Dec 2010 – from end of previous AP to end of accounts
D.    The company is not within the Corporation Tax regime until it starts trading. The period from 1 Apr 2009 to 30 Sep 2009 does not require a return. There is only one AP being from 1 Oct 2009 to the end of the accounts 30 Sep 2010 because it is not more than 12 months.

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04th Oct 2010 11:34

Corporation Tax Periods can't exceed 12 months so ...

A Ltd CT period is 1 January 2010 to 31 December 2010

B Ltd CT period is 1 May 2010 to 31 October 2010

C Ltd CT periods are 1 September 2009 to 31 August 2010 and 1 September 2010 to 31 December 2010

D Ltd CT periods is 1 October 2009 to 30 September 2010 (Trade commencement marks the start of an accounting period not incorporation)

 

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04th Oct 2010 11:35

Oops

Posts crossed in cyberspace

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04th Oct 2010 16:34

Thanks to both of you. This has helped, I actually had the right answers but didn't really understand how. Thanks again for taking the time to answer.

-- N Mvula

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