Costs that are not deductible for corporation tax
Expenses that are not allowed to be subtracted from a business's profits for corporation tax purposes are known as disallowable expenses. This implies that they won't lower the corporation tax that the business has to pay.
What kind of deductions from corporation taxes cannot be made?
- A few legal fees, such as those associated with private cases and those unrelated to regular business operations.
- Devaluation
- Repayment of loans
- Entertainment for clients: dinners, beverages, event tickets, etc.
- Presents from businesses to their clients.
Examples of Corporation Tax Allowable Expenses
- Staff entertainment - unrelated to clients.
- Capital allowances are used to account for the effective depreciation of specific eligible assets.
- Fixed asset disposal losses.
- Repairs - This category comprises costs associated with repairing assets such as buildings, plants, and machinery. As long as there is no significant improvement to the item.
- Customer debts include bad debts that have been written off, i.e. debts that are no longer recoverable.
- Interest on a company's bank loan.
- Salary and pay accrued as long as they are paid within 9 months of the end of the fiscal year.
Penalties and fines
The information above applies to certain instances; if you would want to talk about this topic further, please contact our team.
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