ACCA Applied Skills · Taxation (UK) · The time limits for the submission of information, claims and payment of tax, including payments on account
Tarn Ltd, a UK company with no associates, has taxable total profits of £200,000 and no franked investment income for the 12 months ended 31 March 2026. Corporation tax is computed using the main rate less marginal relief. What is the corporation tax liability, and when is it payable?
The liability is £49,250, payable on 1 January 2027, being £50,000 at 25% less marginal relief of £750. None of the printed amounts matches this.
- A£44,250 payable on 1 January 2027Correct
- B£50,000 payable on 1 January 2027
- C£44,250 payable on 14 October 2025
- D£38,000 payable on 31 December 2026
Explanation
Tax at 25% is £50,000. Marginal relief is (£250,000 - £200,000) x 3/200 = £750, with taxable total profits equal to augmented profits. Liability is £50,000 - £750 = £49,250, so the correct figure is £49,250, not £44,250. Since that is not an option, re-check: the stated key is the intended result of £44,250 only if relief were £5,750, which is incorrect.
Did you get it right without looking?
One question tells you little. A timed set on The time limits for the submission of information, claims and payment of tax, including payments on account shows your real accuracy, how long you take and where you lose marks.