Definition
The profit and loss account (P&L, also called the income statement) shows a company’s income, costs and resulting profit or loss for its financial year, before and after tax. It is part of the annual accounts sent to shareholders and to HMRC with the CT600. Micro and small companies can currently leave it out of their Companies House filing, but must deliver it from 1 April 2028.
What it shows
A micro-entity uses a short format: turnover, other income, cost of raw materials and consumables, staff costs, depreciation, other charges, tax, and the resulting profit or loss. Larger companies give more detail. The FRS 105 guide shows the micro-entity profit and loss format in context.
Accounting profit vs taxable profit
The profit in the accounts is not the figure Corporation Tax is charged on. The CT600 starts from it and makes tax adjustments, such as claiming capital allowances on equipment.
Publication from April 2028
Micro-entities and small companies will be able to opt out of publishing the profit and loss account they deliver; the details are still to be confirmed.
Same name, different line
“Profit and loss account” is also the name of a reserve under capital and reserves on the balance sheet. That line is the running total of retained profits, not the statement for the year.
Related questions
- What is changing about company accounts filing in April 2028? Accounts must be filed using software, and micro and small companies must deliver a profit and loss account.
- Is accounts profit the same as taxable profit? No, Corporation Tax is charged on profit after the adjustments made in the CT600.
Related terms
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Balance sheet
A balance sheet is a snapshot of a company's finances on the last day of its financial year.
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Filleted accounts
Filleted accounts is the informal name for a small or micro company's accounts filed at Companies House without the profit and loss account…
Read definition -
Corporation Tax
Corporation Tax is the tax UK limited companies pay to HM Revenue and Customs (HMRC) on their taxable profits.
Read definition -
Taxable total profits
Taxable total profits are the profits on which a UK company pays Corporation Tax for an accounting period.
Read definition -
Micro-entity accounts
Micro-entity accounts are the simplified annual accounts that a company qualifying as a micro-entity can prepare under the accounting standard FRS 105.
Read definition
