StudentShare solutions
Triangle menu

Taxation Case study - Essay Example

Not dowloaded yet

Extract of sample
Taxation Case study

She is also advised of the important deductions available under the Corporation Tax so that the company can invest surplus funds suitably by way of tax planning measures to claim the allowances and deductions wherever possible.
While the company can claim all the business expenses incurred by it during any financial year, there are certain other provisions governing the capital expenses incurred by the company for the purposes of the business. These are called capital allowances and these allowances cover the expenses incurred for the improvement of the business of the company. By allowing these capital expenses the Corporation Tax Act promotes the working of the companies towards progress.
The company can write off all the revenue expenditures incurred by the company against the income being earned by the company. These expenses are in the nature of the expenses which the company has spent for the promotion of the business of the company. For claiming deduction, these expenses should have been incurred wholly for business purposes and during the previous year. The examples of these expenses include salaries of employees, insurance expenses and other administrative expenses like auditor fees. The company is authorized for the deduction of the interest paid by the company to the banks or other financial institutions for the loans availed by it for business purposes. The interest should have been paid actually during the previous year.
The first allowance is in the nature of depreciation on all working assets including industrial buildings and plant and machinery that are being used by the company for manufacture of products. An amount equal to 4 percent of the cost of the industrial buildings can be claimed by the company by way of writing down allowance. For claiming this deduction the company should have put to use the building in respect of which the deduction is being claimed. When the company constructs some building in enterprise zone the company can claim the whole cost of the building as deduction from the chargeable income.
The position of the writing down allowance in respect of the plant and machinery belonging to the company is as follows:
In general 25 percent on the written down value method is allowed as deduction for the large companies. In the case of small and medium companies there is a first year allowance equal to 50 percent of the cost of plant and machinery that can be claimed as a deduction from the income of the company. The companies that spend capital expenditures on machinery which are using energy saving technology can claim the total value of the machinery in full without limits by way of enhanced capital allowance. Bu for claiming the enhanced capital allowance the technology should be one recognized by the government. The amount of the capital expense can be claimed in full in the first year itself. But if the company feels that the company would be in an advantageous position then the company may choose to carry forward the deduction for the future years and claim the allowance in part.
The ...Show more

Summary

The answer to this question takes the form of a letter addressed to Mrs. Peter explaining her, the various provisions of the Corporation Tax and the deductions available in the Act for the companies. Although detailed provisions are there in the Act, the purpose of this letter is to provide a basic understanding of the provisions affecting the company…
Author : wschneider
Taxation Case study Essay essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Taxation Case study Essay"
with a personal 20% discount.
Grab the best paper

Related Essays

Business Taxation: Zing Zang Zong Case Study
After making loss of $40,000 in the fiscal year that ended on 31 March 2011, the business entity was able to record improvement profitability within the fiscal year ending 31 March 2012. From the projections and forecasts of sales and profitability, there is evidence that the firm is likely to pay more tax of either 40% or 50%.
9 pages (2250 words) Essay
Case Study Essay
The patient experiences acute pain on the chest which lasts for about fifteen minutes a characteristic common with the patients of Angina. The patient also has a history of hypertension and she experiences stress from her current job as an executive (Warburton 2007).
7 pages (1750 words) Essay
Taxation Essay
The tax went into effect on April 1, 1965 and is roughly based on the income tax system, following the same fundamental structure, guidelines, and rules. Also according to Wikipedia, "Since 1997, the UK's Tax Law Rewrite Project has been modernizing the UK's tax legislation, starting with income tax, while the legislation imposing corporation tax has itself been amended; the rules governing income tax and corporation tax have thus diverged.
4 pages (1000 words) Essay
Taxation Case study
Revenue Expenses including expenses for managing investments incurred wholly and exclusively for the purposes of trade are deductible from trading income. Interest and other cost of borrowings taken for trading purposes are deductible in the accounting period in which they are charged in the accounts.
10 pages (2500 words) Essay
Taxation
There revisions in the law is mostly reflected in the changing tax rates, allowances and systems of collection. The three problems in this essay tackles different
6 pages (1500 words) Essay
Taxation
Then it moves onto discuss the issues of the chargeable disposal, the exemptions and part disposals. A company operating in a market has to undergo many processes e.g. the earning of revenue, the deduction of the costs, the payment of wages etc. The consideration of taxes
8 pages (2000 words) Essay
Taxation essay
In accordance with the above, taxation entails means by which regime finances its expenses by imposing charges on populaces and commercial entities (Diamond 2011,
7 pages (1750 words) Essay
Taxation essay
There are many arguments for taxation, but depend with the circumstances at a particular period. In the advent of taxation, the British authority needed revenue to finance the war and management of colonies in the U.S. During the 1930s, the principle
6 pages (1500 words) Essay
Case-study based essay
The construct employee engagement is built on a foundation of concepts like job satisfaction, employee individual motivation and commitment and the organizational citizenship behavior. Proper employee
10 pages (2500 words) Essay
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation