How to estimate your Corporation Tax before year-end
How to carry out a simple estimate and why it matters
You do not need to wait for your year-end accounts to get a sense of your Corporation Tax liability.
A simple estimate
Run your Profit and Loss in Xero for the full year to date and note the net profit figure. Remove any non-deductible costs (client entertainment is the most common). The result is a rough taxable profit estimate. At the small profits rate (19%), multiply by 0.19. At the main rate (25%), multiply by 0.25. If profits are between £50,000 and £250,000, the effective rate falls somewhere between the two.
Why it matters
This estimate tells you roughly what to set aside and flags whether you should be considering any year-end tax planning actions (such as a pension contribution or asset purchase) before your year-end arrives.
💡 Good to know: We confirm the exact figure when preparing your year-end accounts. But having a rough estimate three to six months before your year-end gives you time to act on tax planning opportunities. Contact us if your estimated liability looks materially different from prior years.
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