This is my first post on here, but i've been hanging around this forum for around a month now and am still learning.
I am AAT qualified but have just started my first job in practice and feel out of my depth as the exam questions are different to the real thing.
I've been working a few days a week for free for a small firm of Accoutants for one month now and although I like the work I didn't realise how much I don't know.
Anyhow my question is about Corporation Tax, I did cover this in the AAT course but have totally forgotten the rules as been working as a purchase ledger assistant for 4 years.
I understand that the Corporation Tax rate was reduced from 21 - 20% from april this year but other than that i'm stuck.
The main queries I have are;
1.) Goodwill - is this allowable against Corporation Tax as in a few examples of looked at it seems like soemtimes it is and soemtimes not?
2.) Can I addback a % of for example Telephone or is it 100% or nothing.
3.) How do I calculate the tax on the dividends taken?
Sorry to ask such basic questions but I feel like i'm learning all over again. I don't want to ask my boss as i'm worried he will not give me a chance when my free work stops in 3 months.
I think i'll be honest and say I need some help in some of the technical areas I have identified, fingers crossed this will not count against me when my trial period is up.
1.) Goodwill - is this allowable against Corporation Tax as in a few examples of looked at it seems like soemtimes it is and soemtimes not?
2.) Can I addback a % of for example Telephone or is it 100% or nothing.
3.) How do I calculate the tax on the dividends taken?
Sorry to ask such basic questions but I feel like i'm learning all over again. I don't want to ask my boss as i'm worried he will not give me a chance when my free work stops in 3 months.
Ben
Ben,
Yes you should speak to your boss - especially as I put my comments down I keep needing to ask more queastions!
- Goodwill - allowable for tax is dependant on to who and why it was paid, and depending on the answers there may be other questions before you will know if it is allowable or not.
- Telephone percentage? This is Limited company not a sole trader so strictly speaking if its a private phone you need to consider any BIK on the P11d first before deciding if 100%, or nothing or is there a dispensation? If its a business phone then its 100%.
- Dividends are paid out of the company profits after Corporation tax is paid - so they need to be added back to work out the Corporation tax - but then if your are issuing dividend certificates for a SA return then the Dividend paid is 90% plus 10% tax.
I have spoken to my boss now and he is going to spend some time with me to go through my questions. The only problem is that he is so busy that he does not get much time to train me.
Your boss should hopefully identify that by answering your questions, you will be able to resolve issues with other clients, meaning that he will spend less time in future sorting out your queries.
