Advice on online CT form-needed urgently!

Advice on online CT form-needed urgently!

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The company's y/e is December 05. I thought that their profit of £200 woudl be tax free (well taxed at 0%) and that they would pay 19% on the dividends they paid themself of £8000, which came from profits b/fwd from the year ending Dec 04. However, the CT calculation page is charging nothing for the profits on dividends but 19% on the £200.

I am happy for all and sundry to tell me I am having a bad day but pleae can someone enlighten me as to where I have gone wrong.

Most grateful,

Ems
Emily May

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Euan's picture
By Euan MacLennan
17th Aug 2006 13:59

19% of £200...
...is correct. Not even our tax laws would charge you tax on profits you have not made. If you think this is illogical, remember that the profits brought forward have already been taxed, even if only at 0%.

Only £200 of the NCDs are matched to profits in the 2005 year; the unmatched balance of £7,800 is carried forward. Whatever profit the company makes in the 3 months to 31.03.06, up to £7,800, will be taxed at 19% even if no dividends are paid. From 01.04.06 onwards, all profits will be taxed at 19% whether divis are paid or not.

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