Corporation Tax

Zanilly plc is a manufacturing company based in Sheffield. It has one subsidiary, Zany Ltd. Both companies prepare their financial statements to 31 January each year.

The statement of profit or loss for Zanilly plc for the year ended 31 January 2022 was as follows:

	Notes
Gross profit		1,220,500
Administration expenses	1	(452,000)
Distribution costs	2	(330,100)
Operating profit		438,400
Income from investments:
Dividends received from Zany Ltd.		8,000
Profit on disposal of shares in Crane plc	3	271,000
Bank interest received	4	16,000
Profit before taxation		733,400

Note 1 Administration expenses

These include:
Depreciation of Buildings	16,000
Staff entertaining	20,100
Fines for pollution of local waterways	24,900
Gifts to customers of food hampers. Cost 45 each.	4,500
Qualifying charitable donations	8,800
Entertaining potential clients	7,750

Note 2 Distribution costs

These include:

Vehicle depreciation

90,400

Note 3 Disposal of shares in Crane plc

Zanilly plc disposed of its shareholding in Crane plc on 30 June 2021. The shares were sold for 320,000 and had been purchased as follows:

Date	Shares	Cost
5.4.2012	12,000	32,000
30.5.2016	5,000	17,000

The indexation factor for 5 April 2012 to December 2017 is 0.154, and for 30 May 2016 to December 2017 is 0.058.

Note 4 Bank interest received

Bank interest received is from deposits held for non-trading purposes. 880 of this relates to the year ended 31 January 2023.

Note 5 - Plant and machinery

At 1 February 2021, the tax written down value of the main pool was 66,700.

The following transactions took place during the year ended 31 January 2022:

Date			CO2emissions
6 March 2021	Purchase	Equipment	n/a	200,000
26 July 2021	Purchase	Motor car	70	42,000
1 November 2021	Disposal	Equipment	n/a	16,600
10 January 2022	Purchase	Delivery van	n/a	34,000

The equipment sold for 16,600 on 1 November 21, had been bought by the company for 28,000 in May 2018. The company wishes to claim the maximum capital allowances possible.

Note 6 - Group relief

During the year ended 31 January 2022, Zany Ltd made a trading loss of 62,000. Zanilly has made a group relief claim, for the year ended 31 January 2022, in respect of this loss.

Note 7 National Insurance

Alison is the finance director of Zanilly plc. She is paid an annual salary of 82,000.

Required:

1. Calculate the tax adjusted trading profit for Zanilly plc for the year ended 31 January 2022, starting your computation with the profit from operations.

[9 marks]

2. Calculate the capital allowances for Zanilly plc for the year ended 31 January 2022.

[7 marks]

3. Prepare the corporation tax computation for Zanilly plc for the year ended 31 January 2022.

[10 marks]

4. State the payment date for the corporation tax

[2 marks]

5. Calculate both the Employee Class 1 (Primary) NICs and Employer Class 1 (Secondary) NICs paid by Zanilly plc to HMRC in relation to Alisons salary for 2021/22.

[4 marks]

Total: 32 marks