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Question 35 of BPP Quagmire PLC – Their answer:
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Quagmire plc’s corporation tax liability for the year ended 31 March 2013 is £(1,200,000 x 24%) =
£288,000.
The company will have paid this in four quarterly instalments of £288,000/4 = £72,000.
The instalments will have been due on 14 October 2012, 14 January 2013, 14 April 2013 and 14 July 2013
____________________________________________________Something that Ive never understood, how can these instalments have been paid if they only calculated their tax liability in March 2013? Wouldn’t the October & January instalments have been estimates?
I know its not often for a great deal of marks but Ive been trying to learn the tax dates & fines for hopefully a few simple marks and this has been bugging me for ages!
Hi Mike,
I don’t have the BPP material but as I recall from that question there are 2 associated companies and hence the profit limits to determine the size of the company and thus its corporate tax rate are divided by 2. As Quagmire was a large company in the preceding accounting period and is estimating it will be large in the current accounting period (£1.2M exceeds revised upper profit limit of £0.75M) it is required to make quarterly instalment payments which are indeed based on an estimate of the CT Liability for the accounting period. In reality these quarterly payments are likely to change from payment to payment as hopefully that estimate will become more accurate as the period end date is approached and passed.
Hope it’s slightly less bugging now!
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