Why it matters
Companies may need adjustments for depreciation, capital allowances, disallowed costs and other items. The relevant rate, reliefs, accounting period and associated-company position must also be checked. Keeping a tax estimate alongside management figures helps directors understand the amount that may need to be reserved rather than treating every pound of accounting profit as available cash.
A practical example
A company’s accounts include a depreciation charge on equipment. The tax computation may add that charge back and consider capital allowances instead. This can make taxable profit different from the figure in the profit and loss account without either report being inherently wrong.
A common misunderstanding
Filing the return and paying the tax are separate obligations with different usual deadlines. Nor is the company’s tax bill the only tax to consider when an owner withdraws money. Salary, dividends and loans can have their own consequences.
Sources & further reading
General information for UK readers, updated 3 November 2026. Examples are illustrative. Tax treatment depends on the facts and current rules; seek advice before making a decision.