| Reporting of Corporation Tax liability:
Profit before tax: 81,593
Expected corporation tax (25%): 20,398
Adjusted by:
1. Tax on Disallowable expenses 91
2. Tax relief on Capital Allowances (134)
3. Marginal tax relief (small profits) (2,529)
Current tax charge 17,827
As at 31 March 2025, the Company had no deferred tax assets or liabilities; and over the three years 2022 to 2024, there were no movements in deferred tax expensed or credited to the profit and loss account.
Notes to table
Disallowable expenses – some business expenses, although entirely appropriate for inclusion in the reporting entity’s accounts, are not allowed as a deduction against taxable income when calculating the tax liability. Examples of such expenses are: client entertaining; fines and penalties; depreciation and capital expenditure (which is subject to capital allowances instead).
Capital Allowances - Accounting and tax treatments of fixed assets differ. For accounting, fixed assets are depreciated over their useful lives. For tax, capital allowances are claimed instead. In tax computations, depreciation is replaced by capital allowances. These differences are timing differences; eventually, total depreciation will match total capital allowances. In our tax reconciliation, the add back of depreciation has been included within disallowable expenses, with capital allowances shown separately on its own line.
Marginal Tax Relief - Marginal Relief provides a gradual increase in Corporation Tax rate between the small profits rate and the main rate — this allows you to reduce your rate from the 25% main rate. |