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ACCA Applied Skills · Taxation (UK) · The scope of corporation tax

Pike Ltd is a UK resident company with no associated companies and a 12-month accounting period. It has taxable total profits of £60,000 and receives dividends of £40,000 from an unconnected UK company. What is the corporation tax liability?

Placeholder

  1. A£11,400Correct
  2. B£15,000
  3. C£12,000
  4. D£9,600

Explanation

Augmented profits are £100,000, between £50,000 and £250,000. Tax at 25% on £60,000 = £15,000. Marginal relief = (250,000 - 100,000) x 3/200 x 60,000/100,000 = 150,000 x 0.015 x 0.6 = £1,350. Liability = £13,650. The listed key does not match.

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