ACCA P6 Quick Summary Notes
P6 – Advanced Tax (Jun-14)
Corporation Tax
Large Company - Quarterly payments due:
1. 6 months + 14 days after CAP start
2. 9 months + 14 days after CAP start
3. 12 months + 14 days after CAP start
4. 15 months + 14 days after CAP start
Patent Profits will use 10% rate on income as a result of R&D, being phased over 5yr (only 60% currently)
Augmented Profits use to decide size of company:
AP = Taxable Trading Profits + FII (Frank Investment Income) (dividend from non-associated companies x 100/90)
Disallowable Expenses
Entertaining customers & suppliers
Capex & its legal costs
Legal costs of new short leases
Issue of share
Interest on non-trading loans
Loans written off
15% of High CO2 cars
Dividends Paid
Intangible Fixed Assets amortised is allowable & usually is equal to the amount amortised in the P&L
Long life IFA can be elected to be amortised at a fixed rate of 4% p.a.
Must elect with 2 years of end of CAP
R&D expenses can be deducted at 225% for SME or 130% for Large (SME 105 days p.a.
Self Employed vs Employed
Contract
Integral person
Risk
Control
Legal rights
Equipment / Exclusivity
Substitute
Redundancy
Max non-taxable allowance is £30k
Personal Service Companies – ‘Deemed Salary’ if trying to avoid tax
Amount Rec’d
X
(less) 5%
(x)
(less) Employer Paid NIC
(x)
(less) Pension Paid
(x)
(less) Salary Paid
(x)
XB
(less) Employer NIC [XB x 13.8/113.8]
(x)
Deemed Salary to be added to Income
X
Taxable Benefits
Medical Insurance
Car
Mileage above allowance
Company Car: Cost – Employee contribution (max £5k) = List Price
Taxable Benefit: List Price x CO2% [+3% diesel; +1% per 5g]
Fuel: £21,110 x CO2% [unless all private fuel is paid]
Van
Company Van: £3k
Van Fuel: £564 (if any private fuel use)
Accommodation
Rent paid by Employer or Annual Value (x/12)
+ If Owned & >£75k (Value* – 75k)*4% *Cost or MV if owed 6yrs prior
- Rent paid by Employee
Use
20% x MV when 1st provide
Corporation Tax
Large Company - Quarterly payments due:
1. 6 months + 14 days after CAP start
2. 9 months + 14 days after CAP start
3. 12 months + 14 days after CAP start
4. 15 months + 14 days after CAP start
Patent Profits will use 10% rate on income as a result of R&D, being phased over 5yr (only 60% currently)
Augmented Profits use to decide size of company:
AP = Taxable Trading Profits + FII (Frank Investment Income) (dividend from non-associated companies x 100/90)
Disallowable Expenses
Entertaining customers & suppliers
Capex & its legal costs
Legal costs of new short leases
Issue of share
Interest on non-trading loans
Loans written off
15% of High CO2 cars
Dividends Paid
Intangible Fixed Assets amortised is allowable & usually is equal to the amount amortised in the P&L
Long life IFA can be elected to be amortised at a fixed rate of 4% p.a.
Must elect with 2 years of end of CAP
R&D expenses can be deducted at 225% for SME or 130% for Large (SME 105 days p.a.
Self Employed vs Employed
Contract
Integral person
Risk
Control
Legal rights
Equipment / Exclusivity
Substitute
Redundancy
Max non-taxable allowance is £30k
Personal Service Companies – ‘Deemed Salary’ if trying to avoid tax
Amount Rec’d
X
(less) 5%
(x)
(less) Employer Paid NIC
(x)
(less) Pension Paid
(x)
(less) Salary Paid
(x)
XB
(less) Employer NIC [XB x 13.8/113.8]
(x)
Deemed Salary to be added to Income
X
Taxable Benefits
Medical Insurance
Car
Mileage above allowance
Company Car: Cost – Employee contribution (max £5k) = List Price
Taxable Benefit: List Price x CO2% [+3% diesel; +1% per 5g]
Fuel: £21,110 x CO2% [unless all private fuel is paid]
Van
Company Van: £3k
Van Fuel: £564 (if any private fuel use)
Accommodation
Rent paid by Employer or Annual Value (x/12)
+ If Owned & >£75k (Value* – 75k)*4% *Cost or MV if owed 6yrs prior
- Rent paid by Employee
Use
20% x MV when 1st provide