Do I need to pay corporate tax if my company make loss?
Do I need to pay corporate tax if my company make loss?
Last year, I started a company. The account period for last year ran only 10 days (10-30 June 2006). During these 21 days, there was no sale and there were only 3 transactions (which all related to buy stuffs from vendor ie. we have loss during this account period). I was wondering if I need to pay corporate tax and/or file the corporate tax return form? Can anyone please provide me advice? I'm very new to filing tax. Thank you.
Answers:
Chosen Answer
Greywolf: You won't have to pay any tax if you made a loss - you may get money back, or at least be able to reduce next year's profit by the amount of your loss. But you MUST file a tax return, or the authorities will give you a hard time, because not filing is what bad companies do.
2010-06-02 15:17:41
Greywolf: You won't have to pay any tax if you made a loss - you may get money back, or at least be able to reduce next year's profit by the amount of your loss. But you MUST file a tax return, or the authorities will give you a hard time, because not filing is what bad companies do.
2010-06-02 15:17:41
raysor: A corporation has to file accounts (with companies house in UK) each year. It is a legal requirement. Then it has to account to HMRC. A loss, I believe, can be carried forward to next year and offset against profit. Then you have employees wages (including your own) on which tax and NI have to be deducted and paid to HMRC (another legal requirement). If you don't know any of this then I suggest you employ someone who does (an accountant). Otherwise you will have more costs in the form of fines and penalties
2010-06-03 03:36:18
2010-06-03 03:36:18
jonathan.vowles: Hi Nissy
Firstly, yes you will need to prepare accounts and a corporation tax return and file the accounts with Companies House and both the tax return and the accounts with the taxman. If you don't then you will get a fine from each of the authorities. You should get a letter from them telling you the deadline by when you have to have filed them.
Secondly, you pay corporation tax on company profits. If you haven't made a profit (because you have only spent money not received it) then there will not be a corporation tax bill. Also, if you have made a loss (cos you spent more than you received) then this loss can be carried forward to next year's tax return and used to reduce the profit and therefore the tax bill next year.
If you haven't got a chartered accountant to help sort out your accounts and tax returns then now sounds like a good time to get one!
Jonathan
2010-06-06 07:55:11
2010-06-06 07:55:11