Student article: Marginal relief

This article is intended for ATT students who are sitting their paper 2 and paper 4 examinations in 2024 and it is based on legislation enacted up to and including 31 July 2023.

When I was studying corporation tax for the first time and for many years after small companies paid corporation tax at the small companies’ rate and large companies paid at the higher main rate. To ensure that there wasn’t a sudden jump in tax rates as a monetary threshold was crossed we also had marginal relief which provided us with hours of entertainment and frustration.

And then as the UK reduced its main rate of corporation tax marginal relief was abolished from 1 April 2015 and both large and small companies paid tax at the same rate. This was cause for great celebration among students and tutors alike.

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