In which year is corporation tax not paid?

• A. The year after profits are made
• B. The first year after starting
• C. The year you commence and cease business
• D. The year of the annual return

Answer: (C)

Corporation tax is charged on the profits of a company for its accounting period and is paid after that period ends. It isn’t tied to the calendar year or to when you file the annual return. If a company starts and ceases trading in the same year, there isn’t a full accounting period within that year to generate taxable profits; therefore, no corporation tax is paid in that year. Any tax would depend on the profits (if any) earned in that short period and would be due after the end of that accounting period, which would fall in a later year. The other options describe timing related to profits or filing, but they don’t pinpoint the year in which no tax is payable in the start-and-stop scenario.