Question 1

Section B: Case 3 - Meridian Logistics Plc

Scenario: Meridian Logistics Plc is the parent company of a cross-border shipping and warehousing group. Meridian Logistics Plc owns 80% of the ordinary share capital of Alpha Ltd. Alpha Ltd owns 90% of the ordinary share capital of Beta Ltd. Meridian Logistics Plc also directly owns 60% of Gamma Ltd. All companies are UK resident and prepare accounts to 31 March.

Question: For the purpose of determining whether Meridian Logistics Plc is a 'large' company required to pay Corporation Tax in quarterly instalments, what is the augmented profits threshold for the year ended 31 March 2024?

Accepted Answer

Identify the standard large company threshold (£1.5m). Count the number of 'related 51% group companies' (companies under common control >50%). Divide the threshold by this number.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Excluding Gamma because it's not in the 75% group relief group, forgetting that the QIPs test only requires >50% ownership.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA TX — Taxation Practice Exam 1

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