Corporation tax liabilities — ACCA Practice Question 26

How to approach this question

Apply the rule that a Corporation Tax accounting period cannot exceed 12 months. A longer period of account is split into the first 12 months and the remainder.

Full Answer

C.Into a 12-month period to 31 December 2023, and a 3-month period to 31 March 2024.✓ Correct

For Corporation Tax, an accounting period cannot exceed 12 months. When a company has a period of account longer than 12 months, it must be split. The rule is to take the first 12 months as the first accounting period (1 Jan 2023 to 31 Dec 2023), and the remainder as the second accounting period (1 Jan 2024 to 31 Mar 2024).

Common mistakes

Splitting the period so that the 12-month period ends on the new accounting date (Option B).

Section B - Case 3: Titanium Forging PLC

Titanium Forging PLC is a heavy manufacturing company. It recently changed its accounting date, resulting in a 15-month period of account from 1 January 2023 to 31 March 2024.

How must this 15-month period of account be split for Corporation Tax purposes?

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA TX — Taxation Practice Exam 4

More questions from this exam

Section B - Case 3: Titanium Forging PLC Titanium Forging PLC is a heavy manufacturing company. It recently changed its accounting date, resulting in a 15-month period of account from 1 January 2023 to 31 March 2024. How must this 15-month period of account be split for Corporation Tax purposes?

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA TX — Taxation Practice Exam 4

More questions from this exam

Section B - Case 3: Titanium Forging PLC

Titanium Forging PLC is a heavy manufacturing company. It recently changed its accounting date, resulting in a 15-month period of account from 1 January 2023 to 31 March 2024.

How must this 15-month period of account be split for Corporation Tax purposes?