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Michael Paul Accountants

Corporation Tax Part 4

22nd July 2011

Paul from Michael Paul Accountants Northamptonshire completes a series of articles regarding Corporation Tax.  This is part 4 and explains how taxable profits for Corporation Tax are calculated.

The profit figure on which Corporation Tax is paid (known as the ‘taxable profits for Corporation Tax’) will often differ from the ‘profit before tax’ figure in a company’s statutory accounts.

To arrive at the taxable profits figure the profit before tax figure is adjusted as follows:

  • Depreciation charges are added back
  • Capital Allowances (which take the place of depreciation) are deducted
  • Any other relevant income or gains are added
  • any other relevant deductions, reliefs, allowance or losses are adjusted for.

Then to calculate the Corporation Tax liability:

  • The relevant tax rates are applied to obtain the gross Corporation Tax payable
  • Any relevant tax credits or income tax already deducted from interest received are deducted
  • Any amounts of Corporation Tax for the period already paid are deducted.

At Michael Paul Accountants Kettering, Corby, Northampton and Market Harborough are conveniently located near to our premises in Lamport although we have clients from all over the UK.  We are a firm of Chartered Certified Accountants ensuring you receive a professional and competent service at all times.  We specialise in small businesses, medium sized businesses, sole traders, partnerships and individuals who have to file a tax return.

If you need any advice regarding Corporation Tax or any other accounting or taxation matters please don’t hesitate to contact us.


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