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Working Out Your Taxable Profit and How Much to Tax to Set Aside as a Limited Company
Working Out Your Taxable Profit and How Much to Tax to Set Aside as a Limited Company

Using reporting and Coconut web to understand your taxable profit and how much to set aside as a limited company

Updated over 2 years ago

As a limited company, you may want to quickly understand:

  • Your income

  • Your expenses

  • Your taxable profit

  • How much you should be setting aside to pay HMRC

You can do this in one of two ways:

Bookkeeping on Web

In the bookkeeping tab, you can see all of the category filters on the left hand side of the screen for each subset of categories (business income, expenses etc). To quickly work out your taxable profit for a given time period, you can do the following:

  • Select a date range you'd like to get your taxable profit for and use the date filter to reflect this e.g. for a month, tax year, or custom date range

  • Add up your Staff Expenses and Business Expenses to get your total expenses

  • Subtract your total expenses from your Business income total

  • This should give you your taxable profit for the given period

Category summary

You can also export your category summary report to show you a sum of all categories for a given period.

As above, you can sum any categories that fall under 'Income' to give you your Business income.

You can also sum any categories that fall under 'expenses' to give you your Business Expenses.

You can then subtract your Business expenses from your Business income to give you Taxable profit for the given period.

Working out how much to set aside for tax

To do this quickly, take your taxable profit and multiply this by the % you'd like to save.

For example, if you want to set-aside 30% of your taxable profit, lets say £20,000 then you'd do the following:

  • £20,000 * 0.3 = £6,000

You'll always want to set aside enough tax to pay:

  • Corporation tax under £300,000 - 19%

  • If you pay Dividends, you may also want to set-aside enough to pay this the tax on this too. 8.75% (basic rate), 33.75% (Higher rate)

If you want to know more about Corporation tax or dividend tax, see government articles here:

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