Calculating the CT liability - part 1
You'll learn how to calculate a company's corporation tax liability by applying the correct tax rate based on augmented profits.
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In this lesson
- 0:00 Calculating corporation tax liability
- 0:31 Understanding profit limits and tax rates
- 1:13 Main rate calculation example
- 2:05 Small profits rate calculation
- 2:57 Marginal relief formula and calculation
- 5:48 Adjusting limits for associated companies
About this lesson
This lesson covers the three corporation tax rates in the UK — the small profits rate of 19%, the main rate of 25%, and the marginal relief calculation of 25% less marginal relief — and shows you when each applies. You'll work through practical examples using taxable total profit and augmented profits, understanding the crucial difference between using augmented profits to determine the rate and taxable total profit to calculate the actual tax due. The lesson also explains when to adjust the profit limits for short accounting periods and associated companies, essential knowledge for TX and ATX papers.
Duration: 7m
Transcript
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