Corporation Tax Query

moozy7 · April 2010

Hi

I'm qualified end 2008 and have years of book-keeping experience. I'm building my confidence and am taking the plunge to do a few voluntary jobs for people,that know me.

I have a client who has developed a board game. I thought he was sole trader but turns out that he is a Ltd Co.

He wants me to do some costings for him including an estimate of corporation tax that will become payable so that he can include it in the price.

He has heard that he can pay the CT per unit sold.

I've not heard of this and cannot find anything in my studies / HMRC website etc - anyone heard of this and if so where can I go for more information please?

Thanks

Moozy

sdv · April 2010

moozy7 wrote: »

.....wants me to do some costings for him including an estimate of corporation tax that will become payable so that he can include it in the price.

He has heard that he can pay the CT per unit sold.

Corporation tax is NOT an expense that you can build into costing a product.

Corporation Tax is a share of profit that has been legalised by the government of the state. Currently their share of profit (Corportation Tax) is 20% of the Net Profit.

What you could do is work out the Net Profit per unit and then work out what percentage of the selling price will represent Corporation tax. ie- (profit times 20%) divide it by selleing price per unit times 100.

I would recommend that you use a target costing if you know what are your clients net profit (excluding corporation tax) expectations are.

I have not read or head of CT paid per Unit, but the above suggested calculations should work out CT payable per unit.

AK002 · April 2010

Is corporation tax not 21% ATM? Or did it change at the budget?

Monsoon · April 2010

It's 21%.

moozy7 · April 2010

Thank you so much.

Sometimes its reasssuring to know that I'm not going mad!

Like the target costing idea.

Moozy

Corporation Tax Query

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