Corporation Tax
The taxable profits of a UK limited company are the profits that are subject to corporation tax. Taxable profits are calculated based on the company's accounting profit, which is the profit shown in the company's financial statements.
However, accounting profit is not the same as taxable profit, as certain adjustments need to be made to account for tax reliefs and allowances. The following are some examples of adjustments that may need to be made:
Once the adjustments have been made, the resulting figure is the taxable profit. The corporation tax liability is then calculated by applying the appropriate corporation tax rate to the taxable profit.
It is important for companies to ensure that their taxable profits are calculated correctly, as errors can result in penalties and interest charges. Companies can seek the advice of an accountant or tax advisor to help ensure that their taxable profits are calculated correctly and that they are making use of all available tax reliefs and allowances.
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