Tax
Mandatory payment to government by individuals/businesses.
Formula
Net Profit after Tax = Operating Profit × (1 − Corporation Tax Rate)
Real World
When the UK corporation tax rate rose from 19% to 25% in April 2023, businesses including Tesco reported a direct reduction in post-tax profits despite unchanged trading performance.
Exam Focus
Specify the type of tax in answers — corporation tax affects business profit, while income tax affects consumer spending power; confusing them loses marks.
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