Ltd Company Losses Brought Forward
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Hi there, can anyone advise/confirm I have calculated correctly. CT Return yr end Feb 07, loss to carry forward £7K. Client is now emigrating next month. Once the CT for yr end Feb 07 is accepted, I intend to change ACC REF Date to 31 July 07. CT to be completed to 31/07/07. After dealing with depreciation disallowed, Cap Allowances and balancing charges there is a profit for the period of £9K, am I right in thinking that
1 the loss from the previous year can be brought forward and result in a profit chargeable to CT of £2K,
or
2 as this return is for only part of the year should the loss brought forward be pro rata'd.
I have calculated the CT on the first agenda, all loss cleared from profit, leaving an amount of tax chargeable on profit of £2K, then as the Return straddles April 07, profits charged at 1 month 19%, balance charged at 20%.
Can someone please tell me if this is correct. I need to get cheques from client to cover the CT bill before he leaves the country. Help :roll:
1 the loss from the previous year can be brought forward and result in a profit chargeable to CT of £2K,
or
2 as this return is for only part of the year should the loss brought forward be pro rata'd.
I have calculated the CT on the first agenda, all loss cleared from profit, leaving an amount of tax chargeable on profit of £2K, then as the Return straddles April 07, profits charged at 1 month 19%, balance charged at 20%.
Can someone please tell me if this is correct. I need to get cheques from client to cover the CT bill before he leaves the country. Help :roll:
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Comments
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Re:Ltd Company Losses Brought Forward
Point 1 is correct. You mention balancing charges so I assume trade has ceased. If this is the case you would not normally give capital allowances. These are not given in the year of cessation - instead balancing adjustments are computed which will result in the tax written down value carried forward to be nil.
Kind regards
Steve
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Re:Ltd Company Losses Brought Forward
peugoet means net book value not tax value.0 -
Re:Ltd Company Losses Brought Forwardjustly wrote:peugoet means net book value not tax value.
Justly,
As you are a DFS student I would advise you to study the BTC study texts and establish the difference between "tax written down" and "net book" value.
Our paths crossed a few weeks ago when you disagreed with my answers to the June 2007 DFS paper in relation to the interest accrual.
Whilst I never object to anyone challenging my advice or answers which I give, your disagreements never seem to be backed up with any substantiated guidance.
Your (misguided) arguments therefore fall at the first post.
Clearly you are not in a position to offer advice to an AAT MIP as you fail to understand the basics. Whilst this may seem harsh, it is appropriate in these forums as the advice you give may well be acted upon.
I would advise that you have reasonable knowledge of the subject matter you are replying to before you advise MIPs or, indeed, other members and students of the AAT. This advice was offered to you by another forum member and it will save you a lot of embarrassment.
Steve0