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Acca Lecturer

Corporation tax

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I've just been told by an Acca lecturer that Corporation Tax is 40%. When challenged, he said 'yeah 19% corporation plus 20% income tax so 39%, 40%'.

It's also not possible to have negative retained earnings, apparently. 

The rest if the lecture did not improve if I'm honest.

Replies (13)

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By paulhammett
03rd Sep 2019 17:39

Oh dear.

Thanks (2)
Hallerud at Easter
By DJKL
03rd Sep 2019 18:03

That is what comes from going to lectures given by the man down the pub- oops, ACCA.

Thanks (1)
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By Accountant A
03rd Sep 2019 19:22

I'd be making a formal complaint - certainly if I'd paid for a course presented by someone so ignorant.

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Replying to Accountant A:
By mrme89
03rd Sep 2019 20:39

Yes, taking it up with my manager first thing.

At first I thought I'd misheard but then things such as the above were coming out. I've a side of A4 full of absolute sh 1te he'd come out with.

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Replying to mrme89:
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By paul.benny
04th Sep 2019 15:10

Let us know whether you get anywhere.

If you can spot that some of what he's saying is garbage, how much confidence can you have in the rest of his material. I could maybe forgive being a little out of date on rates or thresholds... but it's 35 years since CT was 40%.

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By penelope pitstop
04th Sep 2019 00:13

To be honest, I wonder why I go on some professional courses sometimes.

Some of the freebies are just a plain waste of time (but not all)

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By SWAccountant
04th Sep 2019 08:56

He's technically wrong obviously, but from a client point of view somebody drawing all of the profits from their company, within basic rate, is paying approximately. So there's that.

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Replying to SWAccountant:
Hallerud at Easter
By DJKL
04th Sep 2019 09:09

Surely much nearer 35%

£100*81%=£81
£81*80%=£64.80

So tax deducted across the process was £35.20 or circa 35%

It is hard to forgive someone merely adding two tax rates together in the manner he is reported to have done, it displays complete ignorance of basic percentages and arithmetic, a sin nearly as bad as wearing brown shoes with a navy pinstripe.

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Replying to DJKL:
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By SWAccountant
04th Sep 2019 10:42

You're obviously correct. I was actually assuming a dividend at higher rate, which is closer to 45% all said and done.

Not that I'm agreeing with the lecturer as its clearly incorrect teaching, but if I'm talking to a client about taxes "19% CT and 32.5% dividend" isn't a good answer. 45% all-in is. Clients couldn't care less about the specifics in my experience.

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Replying to SWAccountant:
Hallerud at Easter
By DJKL
04th Sep 2019 14:19

I am actually not correct re tax, as there could not be a 19% and 20% tax combination with a company re extraction (well there could if a salary was paid that was disallowed for CT deduction, I suppose) , I was more commenting on the reported arithmetic skills of the lecturer rather than his tax understanding.

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Lone Wolf
By Lone_Wolf
04th Sep 2019 09:48

I guess he'd never heard of dividends then? Effective tax rate of 25% if your BR.

Definitely get your money back.

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By JCresswellTax
04th Sep 2019 10:07

So he doesn't realise if you're drawing funds out which are charged to income tax at 20% the company must be obtaining tax relief at 19% so net tax charge is 1% ?

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By paul.benny
04th Sep 2019 15:06

"not possible to have negative retained earnings". I suppose that's true if you're being a language pedant. But only then.

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