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Create a 2 page essay paper that discusses Advance taxation.If Watson considers a change in the payment of tax, the company will need to comply with the rules governing the calculation of tax for a pe
Create a 2 page essay paper that discusses Advance taxation.
If Watson considers a change in the payment of tax, the company will need to comply with the rules governing the calculation of tax for a period of more than 12 months. In the case of a period of 17 months, the tax computation will be apportioned into two chargeable accounting periods i.e. a period of 12 months and the other of 5 months. In this case, the trading income will be apportioned based on the time. Capital allowances will however be calculated separately for each of the chargeable accounting period (CAP)
Moreover, property income will also be apportioned based on time. Non trade interest on the other hand will be considered in the period of accrual in case there are no details to assist in apportionment. Non chargeable gains will be computed for in the period of the gain while gift aid will be considered in the period in which they are paid.
The company will not be entitled to repayment in the first three years since the company has not incurred losses. In the fourth yea, the company will carry forward their entitlement for the non recovered claims plus interest to subsequent years. The relief will therefore be realized in the year 2014 and after.
In conclusion, companies must ensure that they compute their tax liability or make their tax claims as per the tax regulations to avoid unnecessary penalties and to ensure that they operate as per tax
