Adjustments to Trade Profit/(Loss)

From the Adjustments to Trade Profit/(Loss) page you can adjust the company’s profit or loss per accounts to arrive at the adjusted profit or loss figure. The adjusted figure, after the application of any relevant capital allowance and loss claims, will be the amount on which the corporation tax liability will be based.

Turnover and Profit/(Loss) Per Accounts

Enter the figures of turnover, profit (or loss) per accounts and any prior year adjustment from the accounts.

Additions

Use this section to add back to the profit figure any expenses which appear in the accounts but which are not allowable corporation tax deductions.

Select from the ‘Addition type’ menu the category of expense to be added back at Computation Preview.

There are 19 categories of expenses included on the menu, including:

  • Amortisation
  • Capital expenditure
  • Charitable donations
  • Depreciation
  • Disallowable entertaining
  • Loss on sale of fixed assets

Use Description to enter details of the Add back.

Enter alongside Description the amount to be added back.

There is no limit to the number of Addition rows you can create. A fresh row is automatically created whenever all existing rows have been wholly or partly completed.

To delete a row, click on the cross to the left of Addition type.

The details and amounts entered in this section will be included in Computation Preview.

Deductions

Use this section to remove from the calculation of trading profit any income which is either non-taxable or taxable as non-trade profit.

Select from the Deduction type menu the category into which the deduction falls. The menu includes:

  • Directors’ remuneration previously disallowed
  • Non-trade interest received
  • Profit on sale of fixed assets
  • Other deductions

Use Description to enter details of the deduction.

Enter alongside Description the amount to be deducted.

There is no limit to the number of ‘Deduction type’ rows you can create. A fresh row is automatically created whenever all existing rows have been wholly or partly completed.

To delete a row, click on the cross to the left of Deduction type.

The details and amounts entered in this section will be included in Computation Preview.

Adjusted profit/(loss) before capital allowances

This figure is equal to the profit/(loss) per accounts, adjusted for Additions and Deductions.

The figure will flow through to Computation Preview.

If this article hasn’t answered your question, please consider searching the help or contacting us.

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