ExpertEasy2 marksMultiple Choice
ACCA · Question 11 · Corporation tax liabilities
Section A
'Zephyr Winds Ltd', a wind farm operator, prepared accounts for the 15-month period from 1 January 2023 to 31 March 2024.
How will this long period of account be split for Corporation Tax purposes?
Section A
'Zephyr Winds Ltd', a wind farm operator, prepared accounts for the 15-month period from 1 January 2023 to 31 March 2024.
How will this long period of account be split for Corporation Tax purposes?
Answer options:
A.
A 12-month period to 31 December 2023 and a 3-month period to 31 March 2024.
B.
A 3-month period to 31 March 2023 and a 12-month period to 31 March 2024.
C.
Two equal periods of 7.5 months.
D.
A single 15-month chargeable accounting period.
How to approach this question
Remember the rule for long periods of account: split into the first 12 months, followed by the remaining balance.
Full Answer
A.A 12-month period to 31 December 2023 and a 3-month period to 31 March 2024.✓ Correct
For Corporation Tax, a period of account exceeding 12 months must be split. The first Chargeable Accounting Period (CAP) is for the first 12 months (1 Jan 2023 to 31 Dec 2023). The second CAP is for the remaining period (1 Jan 2024 to 31 March 2024).
Common mistakes
Splitting the period backwards (12 months at the end) or splitting it proportionally.
Practice the full ACCA TX — Taxation Practice Exam 3
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