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The Trading income template is the adjustment-of-profit computation for the company's UK trade. It starts from the accounting profit for the trade, applies all the tax adjustments — add-backs of disallowable items, deductions given elsewhere, and capital allowances — and arrives at the taxable trading profit (or loss) for the period.

Table of contents 

When should I use this template?

Use this template where the company has selected UK trade as a business type in Return information. It draws together the analysis and schedules completed elsewhere in the workflow into the trading profit computation.

What do I need to complete first?

Because this template consolidates work done elsewhere in the workflow, complete the following before you use it:

  1. Select UK trade as a business type in the Business type section of the Return information template.
  2. Complete the Profit and loss / OCI analysis.
  3. Complete the relevant adjustment and capital allowance schedules.

How does the computation work?

For the trade, the template pulls together:

  • the accounting profit for the trade;
  • the adjustments analysed in the P&L / OCI analysis and the dedicated schedules — for example depreciation added back, disallowable expenses, car leasing, provisions, unpaid remuneration, pensions and qualifying charitable donations; and
  • the capital allowances claimed in the capital allowance templates (pools, SBA, super-deduction, full expensing, and so on).

Because it refreshes and reads results from those templates, the trading income figure updates as the underlying schedules are completed. The result is the adjusted trading profit or loss that feeds the taxable income computation.

Where does the data come from?

The Trading income computation is assembled automatically from across the workflow:

  • the accounting result of the trade comes from the trial balance (the P&L accounts), via the Profit and loss / OCI analysis;
  • the adjustments to profit are pulled from the P&L / OCI analysis and the dedicated adjustment schedules (depreciation/impairment, disallowables, car leasing, provisions, unpaid remuneration, pensions, qualifying charitable donations, loan relationships, and so on);
  • the capital allowances are pulled from the capital allowance schedules (pools, SBA, super-deduction, full expensing, 50% FYA), which in turn draw on Total fixed asset additions and the Fixed Assets Register; and
  • the R&D adjustment is pulled from the relevant R&D claim template.

Because it reads these results, the trading income figure updates automatically as you complete the underlying templates — you generally do not key figures directly into it.

What flows through to the rest of Corporation Tax?

The adjusted trading profit or loss feeds the Taxable income template and the tax computation. A trading loss feeds the losses templates so that relief can be claimed.

Frequently asked questions

Do I enter figures directly here?

Mostly not. The template consolidates the accounting profit, the adjustments from the P&L / OCI analysis and the schedules, and the capital allowances. Complete those first.

Why has my trading profit changed?

Because it reflects the underlying schedules. As you complete the adjustment and capital allowance templates, the trading income updates.

What if the trade makes a loss?

The adjusted result can be a loss, which feeds the losses templates so relief can be claimed or the loss carried forward.