If the accounting period is less than 365 days, how do you calculate the underlying rate of corporation tax? Do you gross up by 365 days and do calculations based on the grossed up profit or do calculations without grossing up? (I have a case where I have followed the second and the HMIT calculations based on the grossed up profit give higher CT). What is the correct basis?
thanks
james
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"Should be" straightforward
Since the starting rate and small company rate threshholds are reduced pro-rata for short accounting periods there is no need to consider 'grossing-up'. The underlying rate is therefore simply the rate achieved when applying the CT charged to the profits chargeable.