CORPORATION TAX HELP

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
hello

when doing profit adjustment sch d case 1 & 2 where would bank overdraft interest (gross) go as im not quite sure what what do to with it and chargeable gains on the sale of shares what would i do with them

could somebody please help me with this as im really struggling and would be most appreciated

Many Thanks

Ste

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:CORPORATION TAX HELP

    Bank overdraft interest would not normally require adjusting when arriving at Schedule D1 profits as overdraft interest is allowable for corporation tax.

    In terms of Chargeable Gains these would be included as an addition to profits so your tax comp would look like this:

    Profit per the Accounts X

    Add
    Depreciation X
    Entertaining X
    Losses on disposal of assets X


    Less
    Capital allowances X
    Deposit Account interest X

    Net trading profit X
    Add Deposit account interest X
    Add Chargeable gain X
    PROFIT CHARGEABLE TO CORP TAX X

    The above assumes no franked investment income.

    Hope that helps.

    Regards
    Steve

    p.s. The "X" are meant to be in line but the screen doesn't seem to align them properly
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:CORPORATION TAX HELP

    would bank overdraft interest be included as a less item included in the a/c's or do i just ignore it

    Many thanks

    Ste
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:CORPORATION TAX HELP

    No just ignore it for corp tax adjustment purposes as bank interest is allowable for tax so don't adjust the business profit for bank interest. You would only adjust your business profits for disallowed expenses (eg depreciation).

    Regards
    Steve
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:CORPORATION TAX HELP

    i have a question for u, in this particular question for doing schedule d case 1 & 2 what do i do with director's remuneration?

    i have never seen this before, could someone explain what to do with this please.

    Many thanks

    Ste
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:CORPORATION TAX HELP

    would bank overdraft interest be used as a charge on income like gift aid?

    Many thanks

    Ste
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:CORPORATION TAX HELP

    No bank overdraft interest is not treated the same as gift aid - overdraft interest is not adjusted at all in corporation tax it is treated like any other allowable expense.

    Directors remuneration (otherwise known as directors salaries) is also an allowable expense. It is treated the same as staff wages and again no adjustment to profits are required.

    Hope that helps.
    Regard
    Steve

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