Here is a practice question from BPP.
Jess plc Is required to pay corporation tax by Instalments. It had prepared accounts to 31 March each year but decided to prepare accounts for the ten month period to 31 January 2020. Jess pie's corporation tax liability for the period to 31 January 2020 was £500,000. What Is the amount of the final Instalment of corporation tax for the period ended 31 January 2020 and when ls It due?
The answer is £50,000 due on 14 May 2020.
I understood the due date should be 14 May 2020, which is the 14th day of the 4th month after the year end. But for the amount due, I am quite confused because it the first instalment should start from the 7th month, which is 14 Oct 2019 in this case. And because Jess plc has a short period, so the next instalment should be 3 months later, 14 Jan 2020. I think there are only two instalments. So the answer should be £200,000. (instalment amount: 3500,000/10= £150,000; Balancing payment: 500,000-150,0002 = £200,000 )
I believe I am wrong somewhere, just hoping someone could point it out.
Thanks!
YES YOU ARE RIGHT ABOUT THAT . I HAVE SAME PROBLEM IN THIS QUESTION AND ASKED MY TUTOR HE SAID THERE IS MISPRINT IN THE QUESTION
