So I’m seeing this question pop up quite frequently where they ask what would influence a company’s choice of relief claim. It says that the tax rate at which relief would be obtained is a factor and then it says: 26.5% if marginal relief applies (best use). I don’t understand the 26.5% figure since we use the main rate of 25% even when marginal relief applies.
Please do not get confused with this effective rate. I dont teach it. I dont like it Yes it’s a fact but it confuses students. For CT purposes remember this: Loss relief – 1. get any company out of the margin and down to the lower limit. Then if there’s any loss left 2. give losses to companies paying tax at the full rate