CT600 Box 165: Trading Profits Explained

Box 165 is where you report your company's net trading profits on the CT600. This guide explains what goes in this box and how to calculate the figure correctly.

What is Box 165?

Box 165 on the CT600 is labelled "Net trading profits" (or "Trading profits" on some versions).

This box shows your company's profit from trading activities before:

  • Tax adjustments (add-backs and deductions)
  • Capital allowances
  • Loss reliefs
It should match the profit figure from your profit and loss account.

What Goes in Box 165?

Include:

  • Profit from your main trading activity
  • Profit from other trading activities
  • Trading income from all sources
Do NOT include:
  • Investment income
  • Property rental income (goes in Box 190)
  • Bank interest received
  • Capital gains
  • Non-trading loan relationship income

How to Calculate Box 165

Step 1: Start with Your P&L Profit

Take the profit before tax from your profit and loss account:

``` Turnover (sales) £500,000 Less: Cost of sales (£200,000) Gross profit £300,000 Less: Operating expenses (£180,000) Operating profit £120,000 ```

Step 2: Remove Non-Trading Items

Remove any items that aren't from trading:

``` Operating profit £120,000 Less: Bank interest received (£2,000) Less: Rental income (£5,000) Net trading profit £113,000 ← Box 165 ```

Bank interest and rental income are reported separately.

Step 3: Enter in Box 165

Enter the net trading profit figure in Box 165.

Box 165 vs Other Boxes

Understanding how Box 165 relates to other boxes:

BoxDescriptionDifference from Box 165
145TurnoverGross sales, not profit
155Gross profitBefore operating expenses
160Net trading profitSame as 165 in many cases
165Trading profitsThe standard trading profit box
235Adjusted trading profitAfter tax adjustments

Box 160 vs Box 165

Boxes 160 and 165 can appear similar. The key difference:

  • Box 160: Net trading profits (specific trade)
  • Box 165: Trading profits (may combine multiple trades)
For most small companies with one trade, these will be the same.

Common Mistakes

1. Including Non-Trading Income

Wrong: Including bank interest or rental income in Box 165

Right: Report bank interest in Box 175 or 180, rental income in Box 190

2. Using Taxable Profit Instead

Wrong: Entering the adjusted profit (after add-backs)

Right: Enter the accounting profit from your P&L, tax adjustments come later

3. Including Capital Items

Wrong: Including profit from selling assets

Right: Capital gains go in Box 195 or the capital gains section

4. Missing a Trade

Wrong: Only including profit from one trade when you have multiple

Right: Include all trading profits, or break down by trade

Example Calculations

Example 1: Simple Trading Company

Profit and Loss:

  • Turnover: £150,000
  • Cost of sales: £60,000
  • Gross profit: £90,000
  • Admin expenses: £40,000
  • Operating profit: £50,000
Box 165: £50,000

Example 2: Company with Investment Income

Profit and Loss:

  • Turnover: £200,000
  • Cost of sales: £80,000
  • Gross profit: £120,000
  • Admin expenses: £60,000
  • Operating profit: £60,000
  • Bank interest received: £1,500
  • Profit before tax: £61,500
Box 165: £60,000 (excluding the bank interest)

Example 3: Trading Loss

If your company made a loss:

Profit and Loss:

  • Turnover: £100,000
  • Cost of sales: £50,000
  • Gross profit: £50,000
  • Admin expenses: £70,000
  • Operating loss: (£20,000)
Box 165: £0 (leave blank or zero) Box 170: £20,000 (trading losses)

Losses go in Box 170, not as a negative in Box 165.

When Box 165 is Zero

Box 165 should be zero or blank when:

  • Your company made a trading loss (use Box 170 instead)
  • Your company is dormant
  • Your company has only non-trading income

What Happens Next

After Box 165, the CT600 calculation continues:

  1. Box 165 - Trading profits (accounting basis)
  2. Add-backs - Disallowed expenses added
  3. Deductions - Tax reliefs deducted
  4. Box 235 - Adjusted trading profit (tax basis)
  5. Box 410 - Profits chargeable to Corporation Tax
Box 165 is the starting point before tax adjustments.

Tax Adjustments That Come Later

These adjustments happen after Box 165:

Added back (increase taxable profit):

  • Entertaining costs
  • Depreciation
  • Personal expenses
  • Fines and penalties
Deducted (reduce taxable profit):
  • Capital allowances
  • Patent box relief
  • R&D enhanced deduction

When Using TinyTax

TinyTax automatically:

  • Calculates Box 165 from your trial balance
  • Separates trading from non-trading income
  • Identifies items that need reclassifying
  • Shows you exactly how Box 165 was calculated

If you're filling in Box 165, you'll likely also need:

Need Help?

Calculating your trading profits correctly is essential for accurate Corporation Tax. TinyTax guides you through the calculation, ensuring Box 165 and related boxes are filled correctly.

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