Antica Ltd is a software developer. The company’s summarised statement of profit or loss for the year ended 31 March 2021 is as follows:

£

Gross Profit 2,000,000

Add: Rental Income

Interest income

Profit on Sale of Land (see note no.6) 20,000 10,000 130,000 2,160,000

Less: Depreciation (90,000)

Entertainment Expenses 1 (7,000)

Repairs Expenditure 2 (20,000)

Donations and subscription 3 (14,000)

Other Expenses 4 (50,000)

Operating profit 1,979,000

 

Note 1: Entertainment Expenses:

£

UK Customers

Staff Entertainment 5,000 2,000

 

Note 2: Repairs.

£

Painting of office building 8,000

Additional room to the office building 12,000

 

Note 3: Donations and Subscription:

 

£

Donation to National Charity

Donation to Local Charity

Donation to Political party 10,000 1,000 3,000

 

Note 4: Other Expenses:

 

£

Fine and Penalty

Trade debts are written off

Car Expense (car used by the Director for his personal Use)

Customer’s loan written off

Gift of Pepsi can for 100 customers costing £10 each

Car Lease Rent (CO2 emission of the car = 125 g/km)

Balance all allowable expenses 2,000 3,000 5,000 4,000 1,000 8,000 27,000

 

Note 5: Details of Plant and Machinery:

The Opening Balance of the Main Pool (General Pool) of Antica Ltd on 1 April 2020 was £50,000.

The company purchased and sold the following assets:

 

· May 2020 purchased a car for the Director of the company both for business and personal use. The cost was £30,000 and the CO2 emission was 105

· June 2020 purchased machinery for production for £1,200,000 · July 2020 purchased new furniture for the office for £200,000 · July 2020 sold old plant and machinery costing £40,000 for £25,000

 

Note 6 – Chargeable Gain from the sale of plain land:

The company had excess land which was not used for business purposes and the company decided to sell the land. On 2 February 2021 Company sold the land for £180,000. The cost of the land for the company on 10 September 2009 was £50,000.

The Indexation Factors are as follow:

Sept 2009 to Dec 2017 0.705

Sept 2009 to Feb 2021 0.850

This Capital Gain is included in the Profit and Loss

Account

 

Note 7 – Income from property – Rental Income from Overseas:

The company received a Rental Income of £32,000 from Australia. This figure is after deducting 20% tax from Australia. This income has not been included in the Profit and Loss Account.

 

Note 8 – Interest Income:

Interest from Bank deposits for the year ended 31/3/2021 is £15,000, which has not been included in the Profit and Loss account.

 

Note 9 – Dividend Income

Antica Ltd invested in shares of Elephant Ltd, another UK company, and received a Dividend income of £22,000 during the accounting period, which has not been included in the Profit and Loss Account.

 

Note 10 – Trading Loss for the year ended 31/03/2020 was £20,000

 

Required:

Calculate Taxable Total Profit (TTP) and the Corporation Tax Liability of Antica Ltd for the year ended 31 March 2021 after claiming Double Taxation Relief for Rental Income from Australia. Advice to the company on the due date for the payment of tax.

(Show clearly the calculation of Capital Allowance, Adjusted Trading Profit, and Capital gain by applying and justifying various expenses deductible or not deductible