Deferred tax arises from timing differences that are differences between taxable profits and total
comprehensive income as stated in the financial statements. These timing differences arise from
the inclusion of income and expenses in tax assessments in periods different from those in which
they are recognised in financial statements.
Deferred tax is recognised on all timing differences at the reporting date except for certain
exceptions. Unrelieved tax losses and other deferred tax assets are only recognised when it is
probable that they will be recovered against the reversal of deferred tax liabilities or other future
taxable profits.
Deferred tax is measured using tax rates and laws that have been enacted or substantively
enacted by the period end and that are expected to apply to the reversal of the timing difference
The company has unused trading losses of £240,602 which are available to be carried forward indefinitely against profits of the same trade.