This is a Working Example of our Forecasts
Registered users can produce their own business forecasts in minutes; exactly as is shown here.

Report name: Sample Forecast

Forecast Corporation Tax

HMRC rules and how they work: An example of how Figurewizard calculates and applies your capital allowances, taxable profit, and corporation tax forecast.

forecast for year beginning the 1st.May 2023May 2024May 2025

Corporation Tax Year - Period 1


Corporation Tax Year - Period 2

Corporation Tax Period 1 - Days336335335
Corporation Tax Period 2 - Days303030
Net Profit before Tax94,38199,038252,174
add: Depreciation10,87617,54320,290
Adjusted Pre-Tax Profit Cfwd105,257116,581272,464
less: Tax Losses Bfwd000
less: Capital Allowances Period 130,85717,65822,729
less: Capital Allowances Period 22,7551,5812,035
add: Balancing Charge000
Taxable Profit Cfwd Period 165,77376,168219,274
Taxable Profit Cfwd Period 25,8736,80119,578
Taxable Profit for the Year71,64582,969238,852

Corporation Tax Rate - Period 1

Corporation Tax Rate - Period 225%25%25%
Corporation Tax Charge - Period 116,44319,04254,818
Corporation Tax Charge - Period 21,4681,7004,894
Tax before Marginal Relief17,91120,74259,713
Marginal Relief Period 12,4562,300154
Marginal Relief Period 221920514
Corporation Tax Payable15,23618,23759,546
Tax Loss Cfwd000

Calculating Taxable Profit

Taxable profit differs from net profit as in the profit and loss forecast. Figurewizard makes all of the changes needed to create taxable profit.

Depreciation and Capital Allowances

Because cash transfers do  not take place for provisions such as for bad debts they are added back to net profit. Depreciation is a provision, so it too is added back to be replaced by capital allowances.

In their year of acquisition, fixed or non-current assets up to a value of £1 Million ex-VAT are entitled to an annual investment allowance (AIA) of 100%.

These will typically be office equipment, computers, fixtures and fittings, plant and machinery and commercial vehicles.

Property, company cars and computer software do not qualify for AIA: these are subject to lower written down allowances (WDA) over their lifetime.

Corporation Tax Rates Small Company

Taxable profits up to a maximum of £50,000 continue to be taxed at 19%.Taxable profits above £50,000 are taxed at 25%.

Profits from £50,000 to £250,000 however qualify for Marginal Relief.

How to Calculate Marginal Relief Simply

Marginal relief is calculated by a formula 3/200. For example with a taxable profit of £120.000 marginal relief is calculated as follows.
Marginal Relief Limit £250,000
Taxable Profit £120,000
Corporation Tax @ 25% £30,000
Marginal Limit less Taxable Profit £130,000
Divide That by 200 £650
Times 3 equals Marginal Relief £1,950
Corporation Tax less Marginal Relief £28,050

Paying Corporation Tax

For Companies with taxable profits up to £1,500,000, their tax is payable nine months from the end of your financial year plus one day’s grace.

Figurewizard, having calculated both the taxable profit and corporation tax due for you executes payment in the ninth month following your financial year-end.

Companies with profits greater than £1.5 million up to £20 million pay in 4 instalments: in 7, 10, 13 and 16 months from the start of the financial year, not the end.

Companies with profits greater than £20 million will pay in 4 instalments in 3, 6, 9 and 12 months,again, also from the start of the financial year.
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