As always, when calculating the corporation tax payable, the first step is to calculate augmented profits. This determines the rate of corporation tax payable.
As the augmented profits figure is between £300,000 and £1,500,000, then marginal relief applies, this is so, even though the taxable total profits are below £300,000.
Taxable Total Profits
£280,000
Dividend plus tax credit
£27,000 x 100/90
£30,000
Augmented Profits (above the £300,000 limit but below £1,500,000)
£310,000
As augmented profits are between the limits, marginal relief applies.
Corporation tax on taxable total profits £280,000 x 24%
