Corporation Tax calculations are an important part of your company’s tax return, as they adjust the profit shown in your accounts to arrive at the correct figure for taxable profit.
Profits include all sources of income and also Capital Gains but exclude dividends from UK companies.
Some expenses, such as business entertainment, depreciation on assets, and some legal costs for capital expenditure, are not allowed for tax purposes.
They must be added back to the profit in the Corporation Tax computation.
Equally, there are also some capital tax allowances and reliefs which do not feature in a company’s accounts and which are deducted from the profit prior to tax being charged.