H Services Ltd makes its accounts up to 30 April each year. In
the period ending 30 April 2001, it has income from relevant
engagements of £45,000 on which an adjusted taxable profit of
£35,000 arises. Under the legislation it is treated as making
a deemed payment of £31,000 on which secondary Class 1 NICs
liability of £3,222 are paid.
The profits chargeable to corporation tax for the period
ending 30 April 2001 become:
| Adjusted taxable profit | 35,000 | |
| Deduct | ||
| Deemed payment | 31,000 | |
| Secondary Class 1 NICs | 3,222 | |
| Total deductions | 34,222 | 34,222 |
| Revised taxable profit | 778 |
No deduction is made in the company’s accounts or corporation tax computation for the notional 5% allowance made in computing the deemed payment.
