Non-taxable income and previous period capital allowances

Not all accounting profit is taxable as trading income. WeFile provides specific adjustments to ensure your tax computation is completely accurate without corrupting your statutory accounts.

What Counts as Non-Taxable Income?

Non-taxable income refers to accounting profit that should not be taxed as standard trading income. A typical example is the profit on the disposal of a fixed asset. In accounting terms, this increases your profit, but for tax purposes, the proceeds are dealt with separately through capital allowances and balancing charges, so the accounting profit itself must be deducted to avoid double taxation.

Entering Non-Taxable Income

You can enter this adjustment on the Profit & Loss step of the wizard. When you input a non-taxable income figure, WeFile automatically deducts it in arriving at your adjusted trading profit, ensuring your corporation tax calculation is perfectly accurate and avoids incorrectly taxing exempt income.

Statutory Accounts Impact

Crucially, declaring non-taxable income only affects your corporation tax computation. It has absolutely no effect on the statutory accounts filed at Companies House. Your public profit and loss account (if filed) and your balance sheet remain exactly as dictated by standard accounting principles.

Previous Period Allowances

To ensure the prior-year corporation tax charge shown in your accounts' comparative column is perfectly accurate, you can enter previous-period capital allowances and balancing charges on the Profit & Loss step. Because no CT600 is filed for the prior period, you only need to provide the totals, which WeFile uses purely to compute the comparative tax figure.

API Support

For developers integrating with WeFile, these adjustments are fully supported. You can pass the `nonTaxableIncome` field directly in the API payload to automate these exact deductions without manual data entry.