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VAT & tax

Why Small Business Relief did not apply

You ticked Elect Small Business Relief but an amber banner says it does not apply. There are only two reasons: your revenue is too high, or the period ends too late. Here is what to check.

You ticked Elect Small Business Relief on the Corporate Tax worksheet, but instead of the green "applied" banner you see an amber one saying it does not apply, and the worksheet still charges tax at the standard rates. This page explains why, and what to do.

The two reasons

The amber banner that names why the relief did not apply.

Small Business Relief needs both of its conditions to be met. The amber banner tells you which one failed:

  • Your revenue exceeds AED 3,000,000. The relief is only for periods where total revenue is AED 3,000,000 or less. If the revenue line at the top of the worksheet is above that, the relief cannot apply, no matter what is ticked.
  • The period ends after 31 December 2026. The relief is only available for tax periods ending on or before 31 December 2026. A period that ends after that date does not qualify.

If either one is the case, the tick box stays on but has no effect, and the worksheet falls back to the standard bands: 0% on the first AED 375,000 of taxable income, then 9% on the rest.

What to check

The financial year and revenue line to confirm when the relief was refused.

  1. Log in to your workspace.
  2. In the left menu, under Finance, click Your Accounts.
  3. In the accounts sidebar, under Tax, click Corporate Tax.
  4. Read the amber banner. It names the reason, either the revenue or the period end.
  5. Confirm the Financial year at the top is the period you meant to file. Picking the wrong year is a common cause of an unexpected end date.
  6. Look at the Revenue (total income) line in the computation. If it looks too high, check that no draft or mistaken invoices have inflated it.

Note

There is nothing to "fix" if the numbers are correct. If your revenue is genuinely over AED 3,000,000, or the period genuinely ends after the cut-off, the relief simply does not apply and the standard rates below the banner are the right result.

What happens instead

The standard bands charging 0% then 9% when the relief does not apply.

When the relief does not apply, your Corporate Tax is worked out the normal way. Only taxable income above AED 375,000 is charged, and only at 9%. So even without the relief, many smaller firms still owe little or nothing. See How the Corporate Tax worksheet is worked out for the full line-by-line, and Elect Small Business Relief for the conditions in detail.

See also
Elect Small Business Relief →How the Corporate Tax worksheet is worked out →
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