BTC - Marginal relief HELP

ally
ally Registered Posts: 13 New contributor 🐸
in AAT Level 4 (Level 8 in Scotland)
Hellooooo

Could somebody please explain to me when marginal relief applies in calculating corporation tax. I just can't get my head around it!!

Ally

Comments

  • Elena
    Elena Registered Posts: 11 New contributor 🐸
    Hi Ally,

    Sent you a PM.

    Zoe
  • peugeot
    peugeot Registered Posts: 624 Epic contributor 🐘
    Marginal relief is given when annual profits fall between the lower limits of £300,001 and the upper limits £1,500,000.

    The limits above are shared equally between the number of any associated companies. For example if there is 1 associated company, then £300,001 becomes £150,001 and £1,500,000 becomes £750,000.

    Kind regards
    Steve
  • ally
    ally Registered Posts: 13 New contributor 🐸
    Thanks Steve and Zoe for your help!!

    Ally
  • bryan100
    bryan100 Registered Posts: 23 New contributor 🐸
    Do remember that there are two definitions for profits:

    1.'Profits' = tax adjusted profit plus UK dividends (including tax credit received) and is used twice in the formula but is never actually taxed.

    2.Profits = tax adjusted profits which is udes once in the formula and is the figure that is taxed!

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