Taxes Consolidation Act 1997 section 76

Computation of income: application of income tax principles

Section 76 establishes how a company's income is to be computed for corporation tax purposes, by applying income tax principles adapted for companies.

• Company income for corporation tax is computed using income tax rules and principles, with accounting periods treated as if they were tax years.
• Income from all sources is calculated under the same Schedules and Cases as income tax, then aggregated with chargeable gains to arrive at total profits for the accounting period.
• Certain deductions are not permitted when computing income, including distributions (such as dividends) and annual payments (such as yearly interest or patent royalties), though relief for charges on income is given separately against total profits.
• Income tax exemptions and charging provisions carry over to corporation tax, but the remittance basis of assessment does not apply to companies.