Introducing Tax Adjustments: Smarter CT600 Filing with WeFile

When filing a CT600 corporation tax return, your accounting profit rarely equals your taxable profit. HMRC requires specific adjustments to convert your accounts-based profit before tax into chargeable profits — the figure on which corporation tax is actually calculated.

These adjustments include adding back non-allowable expenses like depreciation, claiming capital allowances such as the Annual Investment Allowance (AIA), and deducting any trading losses brought forward from previous periods.

Getting these adjustments wrong can mean overpaying tax, underpaying and facing penalties, or triggering an HMRC enquiry. That's why we built the Tax Adjustments section directly into the WeFile filing wizard — so you can handle everything in one place, with real-time calculations that update as you type.

The Tax Adjustments section appears in Step 2 (Profit & Loss) of the WeFile filing wizard, right below your income and expenses entries. It contains two key input fields and several automatically calculated rows:

Capital Allowances / AIA (£)

This is where you enter your Annual Investment Allowance or other capital allowances. Capital allowances replace the accounting depreciation figure for tax purposes. While depreciation is added back (since HMRC doesn't recognise it as a tax-deductible expense), capital allowances are deducted to arrive at your adjusted trading profit.

Trading Losses Brought Forward (£)

If your company had trading losses in previous accounting periods that haven't yet been used, you can enter them here. These losses are deducted from your trading profits, reducing your chargeable profits and therefore your corporation tax bill.

Once you've entered your income, expenses, and tax adjustment figures, WeFile performs the full tax computation in real time. Here's the step-by-step breakdown that's displayed on screen:

1. Add Back: Depreciation

Your depreciation figure from the expenses section is automatically added back to profit before tax. This is because HMRC does not allow depreciation as a tax-deductible expense — it's an accounting estimate, not an actual cash outflow that qualifies for relief.

2. Less: Capital Allowances

Your entered capital allowances are deducted. These represent the tax relief HMRC actually grants for capital expenditure, replacing the depreciation you added back.

3. Adjusted Trading Profit

This is the result after adding back depreciation and deducting capital allowances. It represents your profit adjusted for tax purposes, before any loss relief.

4. Less: Losses Brought Forward

Any trading losses brought forward are deducted from the adjusted trading profit. WeFile automatically caps this at the available trading profit — you can't create or increase a loss by applying brought-forward losses.

5. Chargeable Profits

The final taxable figure after all adjustments. This is the amount on which corporation tax is charged.

WeFile automatically calculates your corporation tax based on the current HMRC rates and thresholds. The system handles three scenarios:

Small Profits Rate (19%)

If your chargeable profits are £50,000 or below, the small profits rate of 19% applies.

Main Rate (25%)

If your chargeable profits are £250,000 or above, the main corporation tax rate of 25% applies.

Marginal Relief

For chargeable profits between £50,000 and £250,000, WeFile applies marginal relief automatically. This is calculated as (£250,000 − Chargeable Profits) × 3/200, which effectively provides a gradual transition between the small profits rate and the main rate.

The final line shows your Profit for the Year — your profit before tax minus the calculated corporation tax. This gives you a clear picture of your company's after-tax position.

If your filing has a previous comparative period, the Tax Adjustments section displays side-by-side columns — current period on the left, previous period on the right. Every calculation row shows both periods, making it easy to compare year-on-year performance.

The previous period figures are fully editable, so you can ensure your comparative data is accurate before submission. WeFile will also auto-populate previous period data from your last filing if one exists for the same company.

The Tax Adjustments section works seamlessly with WeFile's accounting software integrations. When you import your trial balance from Xero, QuickBooks, or FreeAgent, your income and expense figures are populated automatically — including the depreciation figure that feeds into the tax adjustment calculations.

After importing, you simply enter your capital allowances and any losses brought forward. The rest is calculated for you instantly.

This means you can go from connecting your accounting software to having a fully calculated CT600 tax computation in just a few clicks.

Behind the scenes, the tax adjustments you enter in the wizard flow directly into your CT600 XML submission to HMRC. Specifically:

• Trading Profits map to the Income > Trading > Profits element
• Losses Brought Forward map to Income > Trading > LossesBroughtForward
• Net Trading Profits map to Income > Trading > NetProfits
• Chargeable Profits map to the ChargeableProfits element
• Corporation Tax is apportioned across UK financial years if your accounting period straddles 1 April, with the correct rate applied to each portion
• Marginal Relief is included when applicable

All of this is also reflected in your iXBRL tax computation document, which is generated and attached to the submission automatically. You don't need to understand the XML structure — WeFile handles it all.

Know your capital allowances

The Annual Investment Allowance (AIA) allows 100% first-year relief on qualifying plant and machinery up to £1,000,000. If you've purchased equipment, vehicles, or other qualifying assets, make sure to claim the appropriate allowance.

Track your losses

If your company made a trading loss in a previous period, keep a record of how much remains unused. WeFile will deduct losses from your current trading profits, but you need to enter the correct brought-forward figure.

Review the calculations

WeFile shows every step of the tax computation on screen. Take a moment to review the numbers before moving to the next step — it's much easier to correct figures in the wizard than after submission.

Dormant companies

If your company is dormant, the Tax Adjustments section is automatically hidden since all values should be zero. WeFile handles dormant company filings with a simplified flow.

The Tax Adjustments section is available now for all WeFile users. Simply start a new filing or continue an existing one — you'll find the tax adjustments in Step 2 of the filing wizard, right after your income and expenses.

With real-time calculations, automatic HMRC rate application, and seamless integration with your accounting software, filing your CT600 has never been easier.