What if limited company is not earning any? How much tax to Pay?
I started up running a limited company but not much earnings since November 2009. I am sustaining the business through my personal funds. Do i need an accountant or business advisor or just visit the Inland Revenue? Please advise.
United Kingdom - 4 Answers
People Answers, Critics, Comments, Opinions :
Answer 1 :
You should consult an Accountant. You may be able to claim a loss and still get a return.
Answer 2 :
Companies only pay tax on profits. So if you're company hasnt made any profits you wont be liable to corporation tax, however you will probably want to ring up the inland revenue anyway because they will be able to advise you on how to assess your deductions ie the amount of your own personal money spent on setting up the business and keeping it going :) Good Luck :D
Answer 3 :
I am in the United States, and your rules may differ. Here, if you are not making money, you don't pay any tax. However, if the IRS decides your business is a hobby rather than a business, then you cannot deduct business expenses. I would expect your rules to be similar. I would not advise asking the Inland Revenue, they are related to our IRS. See an accountant or a tax advisor. Grandpa
Answer 4 :
You only pay tax on what you earn, that is why it is called INCOME tax. Yes you should have an accountant, the Inland revenue will not allow you to continue trading at `a loss` indefinitely, they will enquire into how you manage to survive without money and will check to see if you are bartering items instead of using cash. All items have a cash value, i.e. you exchange a loaf of bread for six eggs, the eggs and the bread can be converted into cash values, especially if you do enough bartering!!! Apart from which, your losses from one year can be set against gains from the next year, effectively `writing off` tax for the period that you did earn money and make a profit.
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