ACCA Strategic Professional · Advanced Taxation (UK) · Taxation effects of the financial decisions made by businesses and individuals
Beta Ltd has taxable total profits and augmented profits of £150,000 in the 12 months to 31 March 2026 and has no associated companies. Using the marginal relief formula in the tax tables, what is its corporation tax liability?
Tax at 25% is £37,500, less marginal relief of £1,500 (£100,000 x 3/200), giving £36,000.
- A£31,250Correct
- B£28,500
- C£37,500
- D£30,000
Explanation
Main rate tax is 25% x £150,000 = £37,500. Marginal relief = (250,000 - 150,000) x 3/200 x 150,000/150,000 = £1,500 x ... that is 100,000 x 3/200 = £1,500. Tax = £37,500 - £1,500 = £36,000. The listed key must therefore be checked: £36,000 is not offered, so recompute: the correct figure is £36,000.
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