Harrogate Chocolate Ltd is a limited company incorporated under the United Kingdom’s (UK) law. The company is established in Harrogate and is resident in the UK. Harrogate Chocolate Ltd trades in hand made, vegan, sugar free chocolates and hot chocolates. Harrogate Chocolate Ltd is different from the other companies established in the market across the UK. Therefore, they use the finest chocolates that they buy from the parent company BelManches Chocolate Plc. Harrogate Chocolate Ltd commenced trading on the 1 of October 2022 and the company prepared its first accounts for the six-month period ending 31 March 2023. Paul William is the financial controller, and he prepared the following information: 1 - Trading profit The tax adjusted trading profit based on the draft accounts for the six-month period ended 31 March 2022 is £368,400. This figure is before making any adjustments required for: • Director’s remuneration of £23,000 paid to the managing director of Harrogate Chocolate ltd. The remuneration is in respect of the period ended 31 March 2022 but was not paid until 5 April 2022. No accrual has been made for this remuneration in the draft accounts. The managing director received no other remuneration from Harrogate Chocolate Ltd during the tax year 2021/22. • Capital allowance or Research & Development reliefs. 2 - Dividend Received On 31 March 2023 Harrogate Chocolate Ltd paid a dividend of £6.750 to its parent company BelManche Chocolate Plc. 3 - Donation Harrogate Chocolate Ltd made a donation to a qualifying charity of £1,800 on 20 March 2022. - Plant and machinery Harrogate Chocolate Ltd, purchased the following assets in respect of the six-month period ended 31 March 2022: • 20 September 2021 • 5 October 2021 • 11 October 2021. • 8 November 2021. • • 18 February 2022 The motor car purchased on 18 February 2022 is used by the sales director who estimates 15% of the mileage is for private journeys. 5 - Research & Development Harrogate Chocolate Ltd had a new factory constructed at a cost of £166,100 that the company brought into use on 1 October 2021. The cost was made up as follows: Used office equipment New machinery. Building alterations necessary for machinery installation. Computer equipment for use in R & D of new production techniques 17,800 4,700 Motor Car (CO2 135 g/Km). 10,600 £ 3,400 10,200 Land Site preparation Structural building costs Cold & hot water systems Air heat & ventilation systems Electric car charging point 6 - Research & Development £ 65,700 8,000 74,900 5,200 8,800 3,500 166,100 In November 2021, the company set up a new department to focus on the development of a new, innovative, production technique. The company wants to improve the taste of sugar free chocolate. It was anticipated that the technique would meet the criteria for “Research & Development” tax relief, and the company would qualify as a small/medium sized entity. In addition to the computer equipment purchased, Harrogate Chocolate Ltd also employed two new staff to help with the new process: • Roger was employed from 1 November 2021 on a two-year term fixed exclusive R&D contract with an annual salary of £42,500. Saara was appointed on 1 December 2021 on a permanent contract but was only anticipated to spend 25% of her time on operational tasks and 75% on R&D. Saara’s annual salary is £35,700. 7 - Group Ownership Structure Harrogate Ltd is 100% owned by the parent company BelManches Chocolate Plc which also holds the following shareholding: 100% Nether Ltd 75%Suggar Ltd. 80% Hot Ltd. 45% Cake Ltd. UK 60 % ChocVeg Ltd. UK. Acquired 3 January 2023 UK. Dormant UK. Trading loss £ 50,780 (for the year to 31 March 2023) USA. International Requirements: Question 1- Explain when an accounting period starts for corporation tax purposes.