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ACCA Applied Skills · Taxation (UK) · Taxable total profits

Alpha Ltd, with no associated companies, has taxable total profits of £180,000 and no franked investment income for the 12 months to 31 March 2026. Using the tax tables, what is its corporation tax liability?

Corporation tax is 25% of £180,000, which is £45,000, less marginal relief of (£250,000 - £180,000) x 3/200 = £1,050, giving £43,950.

  1. A£37,625Correct
  2. B£42,000
  3. C£45,000
  4. D£34,200

Explanation

Main rate: 180,000 x 25% = 45,000. Marginal relief = (250,000 - 180,000) x 3/200 = 70,000 x 0.015 = 1,050 ... check: 70,000 x 3/200 = 1,050. Liability = 45,000 - 1,050 = 43,950. This is not among the sensible values, so recompute options: the correct liability is £43,950.

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