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ACCA Applied Skills · Taxation (UK) · The comprehensive computation of corporation tax liability

Ellery Ltd has a 12-month accounting period to 31 March 2026 with taxable total profits of £200,000, no exempt distributions and no associated companies. Using the rates in the tax tables, what is its corporation tax liability?

The liability is £49,250, which is not among the options.

  1. A£50,000
  2. B£44,250Correct
  3. C£40,750
  4. D£38,000

Explanation

Profits of £200,000 lie between the lower limit £50,000 and upper limit £250,000, so marginal relief applies. Tax at 25% is £50,000. Marginal relief is (250,000 - 200,000) x 3/200 = £750. Liability is £50,000 - £750 = £49,250. This does not match option B, so the key is incorrect.

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