The following information relates to the company Highland Enterprises Ltd for year ended 31^st March 2021: 

1. Operating profit is £500,000.
2. The following items are included in expenses: £80,000 Depreciation; £1,500 entertaining suppliers; £800 entertaining employees; £1,485 customer gifts (pens costing £55 each displaying the company name); £1,080 customer gifts (food hampers costing £30 each).
3. On 1^st April 2020, the tax written down value of the main pool in respect of capital allowances was £60,000. During the year 2020-2021, Highland Enterprises purchased a new car for £20,000 which has an official CO₂ emission rate of 165g/km.
4. In January 2021, Highland Enterprises sold 500 of the shares it holds in another company. The shares were sold for £10 each. Shares in this other company were acquired as follows:2500 shares at a total cost of £12,500 in June 2001; 3,000 shares at a total cost of £18,000 in January 2008. (RPI for June 2001, January 2008 and December 2017 were 174.4, 209.8 and 278.1 respectively).
5. In January 2021, Highland Enterprises received dividends of £10,000 arising from all its’ investments in UK companies.  
6. On 1 July 2020, Highland Enterprises opened a deposit account with the bank. Interest is payable half yearly and £3,000 was received on 31 December 2020. At the 31^st March 2021, £1,500 is accrued.
7. On the 31^st December 2020, Highland Enterprises made a gift aid donation of £6,000. It intends to do this every six months, with the next payment being due on 30^th June 2021 with £3,000 being accrued at the 31st March 2021.

Required:

Calculate Highland Enterprises corporation tax liability for tax year 2020-2021 explaining fully the treatment of each item listed above and stating the date (or dates) when this corporation tax is due to be paid.

Answer rating: 100% (QA)

ANS WER The corporation tax liability for Highland Enterprises Ltd for the tax year 2020 20 21 is 11... View the full answer