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In a one of the examples of corporation tax liability calculation,
taxable total profit is 248,205 and augmented profit is 264,500 for 9 moths period. They are calculated as per tax rate 26% – marginal relief.
But the profit is 264,500 which is fall in the lower limit, less than 300,000.
So it should be 20%.
Why they are calculated as per 26%- marginal relief?
Can you please help me?Hi Pavanpavanmehta let me firstly apologise for the delay in reply! I have been on vacation and had not picked up that there were queries on the system. The answer to your question if you have not already discovered it from the notes or lectures is that the Chargeable Accounting Period for which the Corporation Tax computation is being prepared is for just 9 months and therefore the limits must be time apportioned hence the lower and upper limits are now multiplied by 9/12 making the lower limit 225,000 and the upper limit 1,125,000. As the Augmented profit is 264,500 this falls between the limits and the company is therefore marginal!
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