# Business Tax - Marginal Relief Formula - HELP NEEDED

Registered Posts: 5
Hi guys,

I have my business tax exam on Thursday and while working through the practice test on Q4 regarding Marginal Relief formula i'm getting an answer that's very different from that of the answer paper.

The information on the question is:

A company has the following info year ended 31 Dec 15:

TTP: £480,000

I then need to complete the marginal relief formula which I know is:

1/400 x Upper Limit - Augmented Profits x Normal TTP / Augmented Profits = Marginal Relief

1/400 x (£1,500,000 - £492,000) x (£480,000 / £492,000) = £2,459
£2,520 x £0.98

1/400 x £375,000 - £123,000 x £120,000 / £123,000 = £615

I've been looking at it for over an hour so maybe i've just confused myself but I can't work it out.
Any help would be greatly appreciated!

Jack

• Registered Posts: 56
Hi there.
U have to apportion upper limit and augmented profits too...

So 1500000*3/12=375000
480000*3/12=120000

480000+12000=492000*3/12=123000

Believe you can and you're halfway there...
• Registered Posts: 5
BlueJeans said:

Hi there.

U have to apportion upper limit and augmented profits too...

So 1500000*3/12=375000

480000*3/12=120000

480000+12000=492000*3/12=123000

Thank you. I get it now. I haven't seen the x3/12 anywhere when i've been studying the unit but that makes it a lot more straight forward once I remember I need to apply that to everything.

Really appreciate it
• Registered Posts: 106
Hi I would appreciate it if anyone can help me with task 7 and task 4b from the aat sample assessment BTAX 2013