Difference between Net profit and Gross trading profit?

Kayce

Hi all,

I have a small business and so far I had an accountant do my tax return every year. But the business has suffered greatly through Covid and this year I just can't afford an accountant. So, I'm attempting to file my own Form 11, but something is just not adding up and I believe it has to do with the Net profit/loss and Gross Trading profit/loss amounts:

"Amount of adjusted net profit for accounting period"

"Gross Trading Profits/Losses (including other Trade Receipts/Income already listed in the previous section).Enter loss amount as a minus figure."

I've read through all possible help-sections, but I'm no wiser.. Can someone please explain in layman's terms what the difference between the two is?

Any advice is appreciated!

ari101

On the Form 11 Gross Profit = sales + other income less cost of sales/purchases for resale.

Net Profit = Gross Profit less all other expenses/deductions

Adjusted net profit = Net Profit adjusted for non deductible/allowable items (e.g. entertainment, donations, depreciation, private motor, gain or loss on sale of an asset, etc.)

The extract from accounts should add up from income right down to the total adjusted net profit figure, which is your assessable profit from the previous section (before any losses forward/capital allowances)

This is a very simple explanation, it would really be best to find someone to help if you don't know what you are doing. At the very least get out a copy of your Form 11 for 2020 as filed and your 2020 accounts and match the items for 2021. There are limited changes in presenting extracts from accounts in 2021 (I believe they've just added some extra detail in the analysis) so most of amounts should go in more or less the same places.