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The Book-keepers Forum (UK) -> VAT, Payroll & Tax -> How to offset losses
Post Info TOPIC: How to offset losses
NA_AA


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How to offset losses
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Hi,

 

If a client has employment income which is taxed at source, and they also own a Ltd company which has made losses in the current year, then are they able to offset the losses from their Ltd company against the employment income?



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Thanks, Nadia.
Shamus


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No, the person and the company are two totally seperate legal entities.

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Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
NA_AA


Guru

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Thank you, that's what I thought was the case but wanted to confirm



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Thanks, Nadia.
MarkS


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Shaun is right

Corporation tax losses can only be used in the company.

If the Ltd company had taxable profits in the previous year the loss can be carried back to result in a CT refund.  Otherwise the loss can be carried forward to offset against future taxable profits.

Regards

MarkS



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Mark Stewart CA

http://stewartaccounting.co.uk/

Providing accounting, bookkeeping, payroll and tax services to small and medium sized businesses across Central Scotland and beyond.
NA_AA


Guru

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I guess the losses will have to be cf as this is the first year of trading therefore no previous year profits

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Thanks, Nadia.
MarkS


Expert

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Yeah that the only option



__________________

Mark Stewart CA

http://stewartaccounting.co.uk/

Providing accounting, bookkeeping, payroll and tax services to small and medium sized businesses across Central Scotland and beyond.
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