ABC plc’s accountants have prepared the following IFRS income statement summary for the year ended 31 December 20X1:

(Amounts in £)

Revenue 20,000

Expenses (excluding tax) (18,000)

Profit before tax 2,000

The following information is available about ABC’s profit before tax: 

Revenue includes a government grant of £1,500, which is not taxable. Expenses include fines of £1,000 paid by ABC plc during the period. The government does not allow tax-deductibility of fines.

The tax rate for the period is 20%.

What is the current tax expense reported on ABC plc’s P&L for the year ended 31 December 20X1?

Answer rating: 100% (QA)

First we need to adjust the profit before tax for t... View the full answer