ACCA · Question 32 · Corporation tax liabilities

Section C: Constructed Response

BioSynthetix Ltd is a biotech manufacturing company. The company previously prepared accounts to 31 December. It changed its accounting date and prepared accounts for the 9-month period from 1 January 2023 to 30 September 2023.

For this 9-month period, the company had the following results:

• Tax-adjusted trading profit (before capital allowances and R&D enhancements): £180,000.
• UK Property Business Income: £15,000.
• Qualifying Charitable Donations paid: £5,000.

Additional Information:

1. Capital Allowances: The tax written down value of the main pool at 1 January 2023 was £40,000. During the 9-month period, the company purchased new lab equipment (main pool) for £120,000.
2. Research & Development (R&D): BioSynthetix Ltd qualifies as an SME. Included in the trading profit above is £50,000 of qualifying R&D expenditure. The company wishes to claim the SME R&D enhanced deduction (assume the 86% enhancement rate applies for this period).
3. Associated Companies: BioSynthetix Ltd has one associated company.

Required:
Calculate BioSynthetix Ltd's Corporation Tax liability for the 9-month period ended 30 September 2023.

Note: You must show your calculation of Capital Allowances, the R&D enhancement, Total Taxable Profits (TTP), and the Marginal Relief calculation (time-apportioning limits where necessary).