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ACCA Strategic Professional · Advanced Taxation (UK) · Tax administration and the UK tax system

Which statement about quarterly instalment payments of corporation tax is consistent with the profit threshold of £1,500,000 given in the tax tables?

Companies with profits above the £1,500,000 threshold are generally required to pay corporation tax in quarterly instalments. The figure is separate from the £50,000 lower and £250,000 upper limits used for the small profits rate and marginal relief.

  1. AA company with augmented profits above the threshold is generally required to pay by instalmentsCorrect
  2. BA company with augmented profits below the threshold must pay by instalments
  3. CThe threshold is the upper limit for marginal relief
  4. DThe threshold is the lower limit for the small profits rate

Explanation

The quarterly instalment profit threshold is £1,500,000, and companies with profits above it are generally required to pay by instalments. The marginal relief limits are £50,000 and £250,000. The other options confuse the thresholds.

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