Deferred Tax Calculator
Calculate an indicative deferred tax asset or liability, closing provision and annual movement under FRS 102 or IAS 12.
Scope: This tool calculates deferred tax only. It does not calculate taxable profits, current Corporation Tax, marginal relief, CT600 liabilities or payment dates.
Need to calculate current Corporation Tax? Use our UK Corporation Tax Calculator →
Calculation result
Deferred tax provision
Calculate current tax instead. Use the UK Corporation Tax Calculator →
Closing provision by difference
| Description | Category | Type | Opening difference | Closing difference | Rate | Potential tax | Recognised tax | Unrecognised DTA | Destination |
|---|
Opening to closing movement
| Description | Opening provision | Closing provision | Origination/reversal | Rate change | Total movement |
|---|
Recognition and movement summary
- Potential deferred tax assets
- Deferred tax assets not recognised
- Opening net position
- Total movement
- Rate-change effect
- OCI movement
- Equity movement
- Business-combination movement
- Total tax expense including supplied current tax
Offsetting and presentation
Need the current tax provision too? Use the UK Corporation Tax Calculator →. Figures are not transferred between tools.
Calculation guide
How to calculate deferred tax
1. Select the accounting model
FRS 102 uses timing differences plus. FRS 101 and UK-adopted IFRS use IAS 12 tax bases and temporary differences. FRS 105 prohibits deferred tax recognition.
2. Build the gross differences
Reconcile opening and closing differences from fixed assets, provisions, pensions, losses, revaluations, investments, leases and other transactions.
3. Apply the expected reversal rate
Use enacted or substantively enacted rates expected when each difference reverses. A row override supports different reversal profiles and recovery methods.
4. Assess recognition and destination
Recognise deferred tax assets only to the supported extent, then allocate movements to profit or loss, OCI, equity or a business combination.
What is deferred tax?
Deferred tax reflects future tax consequences of transactions and events already recognised in the financial statements. It is an accounting provision, not the Corporation Tax currently payable to HMRC.
Current tax vs deferred tax
Current tax starts with taxable profits and determines tax payable or recoverable for the period. Deferred tax starts with timing or temporary differences and measures future tax effects. Use the UK Corporation Tax Calculator for current tax, marginal relief and capital allowances. This deferred tax tool does not repeat those calculations.
Deferred tax under FRS 102
FRS 102 Section 29 uses a timing differences plus approach. Deferred tax is generally recognised for timing differences at the reporting date, with specific requirements for losses, fixed assets, business combinations, investments, revalued non-depreciable assets and investment property. This differs conceptually from applying a universal carrying-amount-minus-tax-base formula.
Fixed assets and capital allowances
A common FRS 102 fixed-asset timing difference compares accounting net book value with relevant tax balances, including main-pool, special-rate-pool and Structures and Buildings Allowance balances. The schedule should reconcile to the underlying depreciation and amortisation calculation and capital-allowance records.
Deferred tax under IAS 12
FRS 101 follows adopted IFRS recognition and measurement, so this calculator applies IAS 12 for both FRS 101 and UK-adopted IFRS. IAS 12 identifies temporary differences by comparing an asset or liability's carrying amount with its tax base. Liabilities require their own tax-base sign convention, which is why the professional schedule offers separate asset and liability methods.
Initial recognition, leases and decommissioning obligations
The current IAS 12 initial-recognition exception does not apply to transactions that create equal taxable and deductible temporary differences, including many leases and decommissioning obligations. The right-of-use asset and lease liability must be assessed separately rather than entered as one pre-netted amount.
Deferred tax assets and tax losses
A potential deferred tax asset is not automatically a recognised asset. Under FRS 102, unrelieved losses and other deferred tax assets are recognised only when recovery is probable against reversing deferred tax liabilities or other future taxable profits. IAS 12 likewise requires sufficient probable taxable profit, subject to its specific rules. The tool records full, partial, nil or unresolved recognition and shows the unrecognised balance separately.
Revaluations and investment property
The applicable tax rate can depend on whether an asset will be recovered through use, sale or both. Under FRS 102, a non-depreciable revalued asset uses sale rates and allowances. Fair-valued investment property also normally uses sale treatment unless the limited-life consumption exception applies. IAS 12 has its own recovery assumptions. The tool therefore asks for the recovery conclusion and does not calculate a capital gain.
Investments and business combinations
Differences involving subsidiaries, associates, branches or joint ventures can be excluded only when the framework's control and foreseeable-reversal conditions are met. Business combinations need a separate tax-base review, and initial recognition of goodwill has a specific exception. The calculator flags these selections for transparent review rather than applying a blanket exemption.
Deferred tax in profit or loss, OCI and equity
The tax effect generally follows the transaction or event that created it. Professional mode separates profit or loss, other comprehensive income, equity and business-combination movements, while also showing the effect of a change in tax rate.
Can deferred tax assets and liabilities be offset?
Not automatically. Offsetting requires a legally enforceable current-tax set-off right and qualifying taxation-authority, taxable-entity and settlement conditions. If any condition is absent or unresolved, the output retains gross deferred tax assets and liabilities.
Is deferred tax discounted?
No. This calculator does not discount deferred tax assets or liabilities under either FRS 102 or IAS 12.
FRS 105 deferred tax treatment
A micro-entity applying FRS 105 does not recognise deferred tax. Selecting FRS 105 stops the normal computation and directs the user to the current Corporation Tax tool instead.
Deferred tax calculation examples
Accelerated capital allowances
Closing fixed-asset NBV of £500,000 less tax balances of £350,000 gives a £150,000 taxable timing difference. At 25%, the potential deferred tax liability is £37,500.
Deductible provision
A £40,000 provision deductible only when paid creates a £40,000 deductible difference. At 25%, the potential deferred tax asset is £10,000, subject to recovery being probable.
Tax losses
Tax losses of £120,000 at 25% create a potential asset of £30,000. If only £18,000 is supported by probable taxable profits, the schedule shows £18,000 recognised and £12,000 unrecognised.
Revaluation through OCI
A £400,000 taxable revaluation difference at a supported 25% sale rate creates a £100,000 liability. If the gain arose in OCI, the related movement is shown in OCI, not profit or loss.
Frequently asked questions
What is deferred tax?
It reflects future tax consequences of transactions and events already recognised in the financial statements.
What is the difference between current tax and deferred tax?
Current tax is based on taxable profits for the period. Deferred tax reflects future tax effects of timing or temporary differences.
How is deferred tax calculated under FRS 102?
FRS 102 Section 29 uses a timing differences plus approach and applies enacted or substantively enacted rates expected when the difference reverses.
How is deferred tax calculated under IAS 12?
IAS 12 compares carrying amounts with tax bases, identifies taxable or deductible temporary differences, and then applies recognition and measurement requirements.
Is deferred tax recognised under FRS 105?
No. A micro-entity applying FRS 105 does not recognise deferred tax.
Is deferred tax discounted?
No. Deferred tax assets and liabilities are not discounted.
Technical sources
- FRC FRS 102, Section 29 Income Tax
- FRC FRS 101 Reduced Disclosure Framework
- UKEB: UK-adopted IAS 12 Income Taxes
- FRC FRS 105, Section 24 Income Tax
- GOV.UK Corporation Tax rates and allowances
Framework requirements and rate presets reviewed 14 September 2026. A preset is not a substitute for determining the enacted or substantively enacted rate expected on reversal.
Professional use: This is a decision-support calculation. Deferred tax depends on the applicable framework, tax bases, expected manner and timing of recovery, enacted law and evidence supporting deferred tax assets. Review the complete facts and financial statement disclosures before use.
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