COM30070 - Background: company taxation overview: CTSA - differences from ITSA
There are some important differences between CTSA and ITSA
- Under CTSA, companies are chargeable to CT rather than income tax
- CT is charged in a single amount on the sum of ‘profits’ meaning
- Income, computed under the same principles that apply to Income Tax
And
- Chargeable gains, computed under the principles that apply for Capital Gains Tax
- Tax is charged for Accounting Periods (APs)
- The length of an AP can vary (and end on any day of the year depending on the company’s circumstances) but no AP can be longer than 12 months
- By contrast, Income Tax is always charged for the tax year beginning on 6 April
- CT rates and limits are imposed for ‘financial years’, which begin on 1 April and end on 31 March following. For example, the financial year 2011 is the year from 1 April 2011 to 31 March 2012
- By contrast Income Tax rates and limits are imposed for each ‘tax year’ beginning on 6 April
- Companies cannot opt for Revenue calculation of their tax, whereas individuals can
- There is a single, fixed due date for payment of CT, nine months and one day after the end of the AP, subject to the Instalment Payments regime for large companies
- There are no surcharges for tax paid late. There is late payment interest on tax paid late and repayment interest on overpayments of tax
- The notice to deliver (Word 29KB) a return requires the submission of accounts and computations, as well as the return form and any appropriate supplementary pages (Word 32KB)
- The penalty regime for late returns is different from that applying to Income Tax cases. For example in
- ITSA there is no automatic tax-related (Word 30KB) penalty, and you cannot charge a tax related penalty until delivery of the return
- CTSA an automatic tax related penalty can be based upon a Revenue Determination (Word 29KB) of the tax charge
- Carry back reliefs give rise to a reduction in the tax liability for the relevant earlier year(s), but with interest consequences that may be tied to the due date for the later AP
For a list of forms relevant to this subject, see COM30071.
For legislation applying to this subject, see COM30021.
