AAT L4 Business Tax Computations 2

Question 1

A limited company has accounting profits of £180,000.
It includes depreciation of £20,000 and capital allowances are £35,000.
The company donated £5,000 to a political party (non-deductible).
What is the taxable trading profit?

Accepted Answer

£160,000

Answer

£165,000

Answer

£170,000

Answer

£155,000

Question 2

For corporation tax purposes, what is the time limit for submitting a company tax return (CT600) after the end of the accounting period?

Accepted Answer

12 months

Answer

6 months

Answer

9 months

Answer

18 months

Question 3

A company purchases plant and machinery for £100,000. It qualifies for the Annual Investment Allowance (AIA). The AIA annual limit is £1,000,000. What capital allowance can the company claim in the first year?

Accepted Answer

£100,000 (full AIA)

Answer

£18,000 (18% writing down allowance)

Answer

£50,000 (50% first-year allowance)

Answer

£28,000 (28% WDA for special rate pool)

Question 4

A company makes a trading loss of £80,000 in its accounting period. It had trading profits of £50,000 in the previous year. Under terminal loss relief / loss relief rules, what is the maximum the company can carry back?

Accepted Answer

£50,000 (the previous year's profits)

Answer

£80,000 against current year income only

Answer

£80,000 can be carried back 3 years

Answer

£30,000 (the excess after offsetting current year)

Question 5

A company's corporation tax liability is £180,000 and it is not a 'large' company. When must this tax be paid?

Accepted Answer

9 months and 1 day after the end of the accounting period

Answer

On the CT600 filing deadline (12 months after year-end)

Answer

Quarterly instalments throughout the accounting period

Answer

Within 30 days of receiving an HMRC assessment

Question 6

A company receives a dividend of £18,000 from a UK company in which it holds 5% of the shares. How is this dividend treated for corporation tax?

Accepted Answer

Exempt from corporation tax as a small company dividend

Answer

Fully included in taxable profits at the marginal corporation tax rate

Answer

Taxable at 25% as it is investment income

Answer

Included in profits but taxed at a special 10% rate