MARGINAL RELIEF: why in practice the formula is not used?

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Londina
Londina Registered Posts: 814 Epic contributor 🐘
In practice, instead using that complicated long formula (Formula: Fraction x (M – P) x I/P), they just apply 32.5% on taxable profits between £300K and £1500K.

Why we can't do the same?

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  • Bluewednesday
    Bluewednesday Registered Posts: 1,624 Beyond epic contributor 🧙‍♂️
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    because it doesn't work if you have franked investemnt income i.e. where I doesn't equal p

    Plus if you are going to do it you might as well do it properly, you need to fill out the marginal relief fraction part of the tax return and show it on the computation - we just use the 32.5% as a check.
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