The time frame for which a business prepares its accounts, used to measure financial performance and position.
Advance Corporation Tax (ACT) was a system used in the United Kingdom where corporations made advance payments on their corporation tax liabilities when distributions, such as dividends, were made. ACT was abolished on April 6, 1999.
A capital allowance introduced in April 2008 that enables businesses to offset 100% of their capital expenditure in any one year against corporation tax, up to a specified limit. The allowance is available to businesses of any size or legal form and cannot be claimed on non-commercial motor vehicles.
The charge that may be assessed to corporation tax on the disposal of an asset when the proceeds realized on the sale of the asset exceed the written-down value for tax purposes.
Capital allowances refer to allowances against UK income tax or corporation tax available to businesses, sole traders, partnerships, or limited companies that have capital expenditures on plant and machinery used in the business.
A capital gain represents the profit realized from the sale of an asset where the selling price exceeds the original purchasing price. This gain is often subject to capital gains tax, depending on the jurisdiction and applicable legal provisions.
A chargeable event refers to any transaction or occurrence that results in a liability for income tax, capital gains tax, or corporation tax.
A Close Investment Holding Company is a type of close company that is primarily engaged in holding investments rather than trading or property letting, which subjects it to full-rate corporation tax without the benefit of lower rates and reliefs.
Corporation Tax (CT) is a tax charged on the total profits of a company resident in the UK during each accounting period. The rate of corporation tax varies depending on the level of profits of the company.
Corporation Tax (CT) is a tax imposed on the profits of corporations or businesses. This tax is calculated and administered by national governments and varies widely between countries.
Taxation, the effect of which is intended to be borne by the person or organization that pays it.
A fundamental principle of UK income tax and corporation tax whereby expenditures that have a dual purpose are not deductible in computing profits subject to tax unless they can be dissected to identify wholly business-related expenses.
The annual UK Act of Parliament that changes the law relating to taxation, implementing the rates of income tax, corporation tax, etc., proposed in the preceding Budget.
An in-depth overview of the financial year, including definitions, examples, related terms, online resources, and suggested reading materials.
In the UK, a special capital allowance against corporation tax that is granted in the year of purchase of an asset in place of the standard writing-down allowance of 25%.
Gaming Duty is a tax levied on the profits of a gaming company, imposed in addition to corporation tax. It includes taxes from both traditional and remote gaming activities.
In the UK, General Commissioners are an unpaid local body of reputable individuals appointed to hear appeals against income tax, corporation tax, and capital gains tax assessments or related disputes.
Gross corporation tax is the total amount of corporation tax payable on the profits chargeable to corporation tax for an accounting period, calculated before deduction of any income tax suffered on investment income.
Group income refers to a dividend paid by one group company to another within the same corporate structure. These dividends received are not subject to corporation tax.
Group relief is a tax mechanism allowing companies within a 75% ownership group to transfer qualifying losses to other group companies, thus optimizing their overall tax position. From April 1, 2000, group members no longer have to be resident in the UK to qualify for this relief.
The Imputation System is a corporation tax framework in which the company distributing dividends pays tax on those dividends, and shareholders who receive the dividends are considered to have incurred tax on those dividends as well. The UK operated an imputation system until 1999.
Indexation is the practice of adjusting the chargeable gain from the sale of an asset to take account of inflation over the period of ownership, and the policy of connecting economic variables like wages, taxes, and pensions to rises in the general price level.
An investment trust is a company that collects funds from shareholders to invest in a diversified portfolio of securities, aiming to achieve income and capital gains. While similar to unit trusts, investment trusts have several distinctive characteristics.
Industrial information and techniques that assist in manufacturing or processing goods or materials. Capital expenditure incurred in the acquisition of know-how may qualify for allowances against corporation tax.
Mainstream Corporation Tax (MCT) was formerly a key component of the corporation tax system in the UK, calculating a company's tax liability for an accounting period after the offsetting of Advance Corporation Tax (ACT), which was abolished in 1999.
Marginal Relief is a UK tax relief available to companies whose profits chargeable to corporation tax fall between certain defined limits for a financial year. This relief aims to smooth the transition between various corporation tax rates.
The pay and file system was a former procedure for paying corporation tax in the UK, introduced for accounting periods ending after 30 September 1993. It required companies to file a detailed return within twelve months of the end of the accounting period.
An essential financial term representing the profits of a company that are subject to corporation tax, adjusted for allowable deductions.
Profits chargeable to corporation tax (PCTCT) represent the total taxable profits of a corporation on which corporation tax is calculated. This includes profits from trading, property, investment income, overseas income, and chargeable gains, after deducting any allowable charges.
A Progressive Tax is a tax mechanism where the tax rate increases as the tax base increases. This kind of tax structure aims to distribute the tax burden more equitably based on the taxpayer's ability to pay.
A trading loss arising in a current accounting period as a result of computing the profits and losses of an organization in accordance with accepted corporation-tax principles.
Rollover relief allows businesses to defer capital gains tax or corporation tax when proceeds from a disposable asset are reinvested, thus potentially increasing any gains from future asset disposals.
The term 'schedule' can have several different meanings within the context of accounting, tax legislation, and planning. In the UK, it is used extensively in tax legislation and accounting practices.
A scheme for the self-assessment of tax by companies introduced in the UK for all companies with an accounting period ending after 1 July 1999. This includes the timely submission of tax returns and payment of tax liabilities.
Shadow Advance Corporation Tax (Shadow ACT) refers to the system that applied to any unrelieved surplus Advance Corporation Tax (ACT) on 6 April 1999, when ACT was abolished. It preserved the right to carry forward surplus ACT without reducing the corporation tax liability for periods after 6 April 1999.
SME stands for small or medium-sized enterprise. The term is widely used without a standard definition, varying based on net worth, turnover, profits, or number of employees.
A body of specialized tax lawyers appointed to hear appeals against assessments to various taxes, including income tax, corporation tax, capital gains tax, and inheritance tax.
The specified domain on which a tax is levied, such as an individual's income for income tax, the estate of a deceased person for inheritance tax, and the profits of a company for corporation tax.
A tax holiday is a government incentive program that offers a temporary reduction or elimination of tax payments for businesses, providing economic impetus for specific activities such as export growth or new industry development.
Penalties imposed by tax authorities for failing to meet statutory tax requirements, differing for income tax, corporation tax, and value-added tax (VAT).
A levy imposed on individuals and corporate bodies by central or local governments to finance government expenditures and implement fiscal policies, excluding payments for specific services rendered.
The UK legislation consolidating the law relating to the administration and collection of income tax, corporation tax, and capital gains tax.
Tonnage tax is a method of calculating the corporation tax liability of a ship-owning company, allowing taxes to be based on the net registered tonnage of its shipping fleet instead of the actual profit or loss made.
