What expenses can I claim for Corporation Tax filing?
1. Ltd Companies are subject to Corporation Tax. Before filing Corporation Tax, Limited Company Accounts must be adjusted for this purpose. It is necessary to do so because expenses that can be claimed for Corporation Tax differ from those that can be deducted by the Self-employed.
2. For Corporation Tax, Limited Companies cannot take off from profits the disallowable expenditure.
3. Among the disallowable expenses for Corporation Tax Purposes are Depreciation, Capital Expenditures, Fines (except when incurred while performing the job and the company pays the bill), Entertainment, Gifts to Customers, Charity Donations, Legal Expenses, Provisions for Bad Debt, and some Loan Interests. The disallowable expenses must be added back to the net Profit to accurately reflect the accounts for Corporation Tax filing.
4. Trading Income is also adjusted by accruals and prepayments (bills for electricity, water, and other adjustments) which are part of the income and expenditure if they are outside the reported period.
5. Additionally, some companies can claim Research and Development Allowance (R&D) if they work on innovative projects in science and technology. They must, however, adhere to the:
6. R&D can significantly help developing businesses as the government generously endorses many projects.
If you are unsure whether your accounts are ready for Corporation tax Filing, please get in touch to request support.