Unit 11. Corporate tax in great britain

Exercise 1

Practise reading the following words and collocation

1. vary; through; authorities; exempt; exceed; expenditure; machinery; computations; issue; lodged

2. industrialized countries; corporate bodies and unincorporated associations; marginal rate; capital gains; appropriate corporation tax rate; annual allowances; accounting period; two equal installments

3. to impose tax; calculate the profits; a rate is applied to profits; to send completed tax return; penalties are charged; assessment is incorrect; distribute profits to shareholders

Corporate tax in great britain

Tax imposed on the profits of a company is called corporation tax. All countries tax corporations in this way.

The rates in different countries vary and some have a specially low rate for small companies. Countries also differ in the way in which they calculate the profits on which the tax is imposed.

The rates of company tax in Britain are lower than in most other industrialized countries. All companies resident in Britain, non-resident companies trading in Britain through a branch or agency, corporate bodies and unincorporated associations are subject to corporation tax. Local authorities are exempt.

The standard rate is 33 per cent. Small companies with profits of less than £ 250 000 a year pay 25 per cent. A marginal rate of tax is applied to profits between £ 250 000 and £ 1.25 million. Where profits exceed £ 1.25 million, the whole of the company profit is taxed at the full corporation tax rate.

Capital gains made by companies are taxed at the appropriate corporation tax rate. Expenditure on plant and machinery qualifies for annual allowances of 25 per cent. If a company distributes profits to its shareholders, it is required to pay advanced corporation tax (ACT) on these distributions.

Taxation and payment are based on the financial statements prepared by the company. The company is required to send its completed tax return, accounts and tax computations to the Inspector by the fixed date, twelve months after the end of its accounting period. If the company does not, penalties are charged.

Corporation taxes are charged for a financial year which runs from 1 April to the following 5 April. Companies generally pay corporation taxes nine months after the end of the accounting period. Individuals usually pay taxes in two equal installments on 1 January and 1 July. Usually taxpayers are given 30 days to pay from the date of issue. If the company or the person believes the assessment is incorrect an appeal may be lodged against it. Appeals are made to either the General Commissioners or the Special Commissioners. They are completely independent of the Inland Revenue.

Active vocabulary

	corporation tax	Налог на прибыль организации
	to impose	Облагать (пошлиной, налогом)
	to impose a duty	Облагать пошлиной
	to impose tax	Облагать налогом
	to tax	Облагать налогом
	profit (n)	Прибыль
	advanced profits	Ожидаемая прибыль
	after tax profit	Прибыль после налогов
	distributed profit	Распределяемая прибыль (выплачивается акционером в форме дивидендов)
	excess profit	Сверхприбыль
	loss of profit	Потеря прибыли
	windfall profit	Непредвиденная прибыль
	to earn profit	Заработать прибыль
	to make profit	Получать прибыль
	to turn a profit	Стать прибыльной (о компании)
	resident (a)	Проживающий, постоянно живущий
	corporate body (n)	Корпоративная организация
	association (n)	Общество, организация, союз
	subject (a)	Подлежащий (to-чему-либо)
	exempt (a)	Освобожденный (от налога, воен.службы и т.д.)
	£ (pound)	Usually written
	marginal rate	Предельная ставка
	to exceed	Превышать, превосходить
	capital gains	Добавочный капитал, прирост капитала(положительная разница между вложенной суммой и суммой, полученной при реализации актива)
	expenditure (n)	Расход
	government (national,state) expenditure	Государственные расходы
	cash expenditures	Денежные расходы
	additional expenditures	Дополнительные расходы
	expenditures on personnel	Расходы на заработную плату персонала
	to overestimate expenditure	Завышать расходы
	to restrict expenditures	Ограничивать расходы
	to meet expenditures	Оплачивать расходы
	to cut expenditures	Сокращать расходы
	allowance (n) tax allowance personal allowance	Налоговая скидка Необлагаемая часть дохода Необлагаемый минимум (дохода)
	finincial statement (n)	Финансовый отчет
	tax return (n)	Налоговая декларация
	computation (n)	Расчет, вычисления
	accounting period (n)	Отчетный период
	penalty (n)	Штраф, штрафные санкции, неустойка
	to charge	Взимать сбор
	assessment (n)	Обложение
	to lodge	Предъявлять (требование)
	the Inland Revenue	Управление налоговых сборов

Exercise 2

Find the most suitable Russian equivalents to the following English collocations

Tax imposed on the profits; the rates of company tax; non-resident companies trading in Britain through a branch or agency; to be subject to tax; to be exempt; to be applied to profits; capital gains made by companies; to be taxed at the rate;to quality for annual allowances; to be based on the finincial statements; to be required to send; to pay taxes in two equal installments; an appeal may be lodged against it; to be required to pay advanced corporation tax.

Exercise 3

Find English equivalents to the following Russian collocations

Облагать налогом подобным образом; отличаться тем, каким образом подсчитывать доход, облагаемый налогом; быть освобожденным от уплаты налога; предельная ставка налога относится к доходу от 200 до 300 фунтов; расход на сооружения и оборудование подлежит ежегодной налоговой скидке; в основе налогообложения лежит финансовый отчет; от компании требуется высылать инспектору налоговую декларацию, отчетность и налоговые вычисления; можно предъявить апелляцию.

Exercise 4

Answer the following questions

1. In what way do countries differ as far as the corporation tax is concerned ?

2. What entities have to pay a tax in Great Britain ?

What companies are exempt from taxes ?

3. What do you know about the rate of taxation ?

4. What are taxation and payment based on ?

5. What kind of documentation do companies have to send to the Inspector ? What happens if the company fails ?

6. In what period of time do companies and individuals have to pay taxes ?

7. What can a company or a person do if the assessment is incorrect?

8. In what case is advanced corporation tax paid ?

Exercise 5

Guess the meaning of the words by their definitions

1. a compulsory payment to a government to raise revenue, levied on income, property, or goods and services;

2. to ask (an amount of money) as a price;

3. (in Britain) an amount of a person’s income that is not subject to income tax;

4. money gained in business or trade;

5. not subject to an obligation, tax, etc.;

6. a legal punishment for a crime or offence;

7. a large business or company;

8. the levying of taxes or the condition of being taxed

Exercise 6

Make a short oral summary of the text

Exercise 7

Read the text and answer the questions after it

When companies start to trade in a number of countries they can find themselves liable to tax in more than one jurisdiction. A company will normally be liable for domestic tax on all its worldwide profit no matter where it arises. It may also owe tax on that same profit in the country in which it is incurred.

To help companies avoid being taxed twice on the same profit in two different places, many pairs of countries have so-called double-taxation agreements between themselves. These are often very complicated and deal with much more than company profits. They may include, for example, provisions to avoid the double taxation of income, dividends or interest payments. The agreements normally allow companies that have been taxed on profits in the country where they arose to deduct those taxes from their tax bill in their country of residence. Moreover, when there is no double-taxation agreement companies can often treat the tax abroad as a deductible expense when calculating their domestic taxable profit.

1. How does it happen that companies become liable for double taxation ?

2. What is done to avoid being taxed twice ?

3. Why do many countries have a double-taxation agreement ?

4. What may happen when there is no double-taxation agreement ?