You do not need to work out the Corporation Tax before you bring your figures into Tax Optimiser. Import the trial balance before tax, let the computation work out the tax, then add that figure to the accounts with one button. This page shows how.
Why the accounts can be missing the tax
The Corporation Tax computation starts from the profit before tax, so it gives the right answer whether or not the trial balance already has a tax charge in it.
The accounts are different. They only show a tax charge, and the tax owed to HMRC, when the trial balance has figures on two accounts:
- Corporation tax charge, the tax in the profit and loss account.
- Corporation tax provision, the tax owed, in creditors due within one year.
A trial balance taken before the tax was calculated has neither, so the accounts would show a profit with no tax on it.
The notice on the Corporation Tax screen
Open Corporation Tax for the period. When the computation shows tax to pay and the trial balance has nothing on the Corporation tax charge account, a notice appears above the sections.
In the example, Example Joinery Ltd made a profit of £29,000 in the year to 31 March 2025. The computation shows tax of £5,510.00, and the imported trial balance has no tax in it.
Adding the charge
- Save any changes on the screen first. The notice is hidden while there are unsaved changes, so the figure it offers is always the saved one.
- Press Add tax charge to accounts. The notice shows exactly what will be posted.
- Press Add to confirm, or Cancel to leave the accounts as they are.
The screen then confirms the charge has been added. The Corp tax payable figure does not move, because the tax charge is never part of the profit the tax is worked out on.
What is posted
How the charge goes on depends on how the figures were entered.
| How the figures were entered | What happens |
|---|---|
| Imported trial balance | A journal dated the period end: debit Corporation tax charge, credit Corporation tax provision. It appears in the Journal List on the Trial Balance screen. |
| Manual Entry | The amount is added to the Corporation tax charge and Corporation tax provision lines of the trial balance. |
| Simple Entry | Nothing to do. The Corporation tax step puts the charge in the accounts for you. |
| Connected bookkeeping software (Xero, QuickBooks, Sage, FreeAgent, QuickFile) | The button is not offered, because the figures come from your ledger. Post the journal in your bookkeeping software, then sync the trial balance. |
If you are not allowed to approve journals, the journal is saved as a draft. The accounts do not change until someone who can approve journals approves it in the Journal List. See Journals.
If the tax changes afterwards
If you later change the computation, for example by disallowing an expense or claiming capital allowances, the tax changes but the charge in the accounts stays as it was. The Corporation Tax screen then shows both figures, with an Update tax charge button.
In the example, £2,000 of client entertaining was disallowed after the charge was added, so the tax rose from £5,510.00 to £5,890.00. Pressing Update tax charge and confirming posts the £380.00 difference: debit Corporation tax charge, credit Corporation tax provision. If the tax had gone down, the journal would be the other way round.
The earlier journal is kept, so the Journal List shows the original charge and each adjustment. On Manual Entry the two trial balance lines are changed by the difference instead.
The button is only a prompt. If the charge in your accounts is meant to differ from the computation, leave it.
Common questions
Do I have to calculate the tax outside Tax Optimiser?
No. Bring in the trial balance before tax. The computation works out the tax, and the button puts it in the accounts.
My trial balance already includes the tax. Do I need to do anything?
No. The Add button only appears when the Corporation tax charge account is empty. If your figure differs from the computation, the screen shows both and offers Update tax charge, so you can decide which is right.
Does adding the charge change the tax I pay?
No. Corporation Tax is not a deductible expense, so the charge is left out of the profit the tax is worked out on.
Why is there no notice for my company?
There is no tax to add (a loss or nil profit), the accounts already have a charge, the period is locked or complete, or the company uses Simple Entry, which adds the charge itself.
Does it include the charge on loans to directors?
No. The section 455 charge on loans to participators is repaid by HMRC when the loan is repaid, so it is not part of the tax charge in the accounts.
