Confused – Chapter 7(Example 3)

The question and answer i am referring to:
Open Tuition Notes(F6)
Example 3- Chapter 7(Trading Losses)-Page 51-Notes
Answer – Pages 200, 201

Following the answer to this question, on page 201, the options given have listed tax saving calculations if the chosen options are made.

However, what i do not understand is that why has she calculated in Option 1, 20% tax for £28375. Isnt it £37400?

Please explain.

Many thanks in advance