Question
Stanmer Ltd has produced accounts for the year ended 31 May 2021. Profit before tax has been calculated at 1,750,000. Included in this calculation are:
Stanmer Ltd has produced accounts for the year ended 31 May 2021. Profit before tax has been calculated at 1,750,000.
Included in this calculation are:
Interest paid on overdraft 27,900
Depreciation 113,500
Client entertaining (note 1) 34,750
Legal and professional fees (note 2) 34,000
Miscellaneous (note 3) 97,650
Notes:
1. Made up of entertaining and 10 x Christmas food and drink hampers
2. Legal and professional fees includes charges for chasing customer debt (17,500) and for the purchase of a new freehold property (3,500)
3. Includes a 500 qualifying charitable donation to a national charity
4. Stanmer Ltd spent 15,500 on research and development expenditure which qualifies for the RDEC scheme
5. Revenue includes 10,000 of sales (10 per unit) from a wholly owned subsidiary operating in a tax regime with lower corporate tax rates than the UK. HMRC considers that a more appropriate selling price would be 15 and will seek to make an adjustment to total taxable profit.
The tax written down value in the general pool brought forward at 1 June 2020 was 365,000. The tax written down value in the special rate pool brought forward at 1 June 20 was 83,750. During the year Stanmer Ltd had additions of 123,00 for the general pool and additions of 22,000 for the special rate pool. Disposals of 43,250 were made from the general pool during the year.
Questions
1. Calculate the capital allowances that Stanmer Ltd can claim for the year ended 31 May 2021
2.Prepare a corporation tax computation showing the total corporation tax due the for year ended 31 May 2021
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