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Investment loss impact on Corp tax and VAT

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    Investment loss impact on Corp tax and VAT

    Hello,

    I made a bad investment (crypto - no smirking please) last year via my limited and have now cashed out at a loss of £20k. Please could someone advise whether this will have an impact on Corp and VAT tax for the company?

    Thanks in advance
    Bb

    #2
    Originally posted by 94bb View Post
    Hello,

    I made a bad investment (crypto - no smirking please) last year via my limited and have now cashed out at a loss of £20k. Please could someone advise whether this will have an impact on Corp and VAT tax for the company?

    Thanks in advance
    Bb
    I think you need to understand the basics of how a company works.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

    Comment


      #3
      Well yes, clearly the OP does. However, briefly:

      1. VAT has nothing to do with it. Why do you think it does?

      2. CT is charged on profits. If you've made a loss then yes, it will have an impact on the CT due.

      3. Be careful YourCo doesn't get reclassified as an investment vehicle: always possible if your speculating with its money. If it does, your tax position will be a whole lot worse.

      4. What else don't you know?
      Blog? What blog...?

      Comment


        #4
        Originally posted by malvolio View Post
        Well yes, clearly the OP does. However, briefly:

        1. VAT has nothing to do with it. Why do you think it does?
        Hope he doesn't mean he has no money to pay his vat, or think that somehow he doesn't have to pay some part of the vat due to his losses
        Last edited by jmo21; 19 January 2019, 20:59.

        Comment


          #5
          2...
          See You Next Tuesday

          Comment


            #6
            Originally posted by Lance View Post
            2...
            Checked the obvious, but nothing so far. Watching...
            Down with racism. Long live miscegenation!

            Comment


              #7
              Hi - thanks for your response. I was informed by someone else that the loss can only be used to offset profits made against profits for another investment, and therefore can not be used to decrease Corp tax eg if I made a profit of £30k, only £10k would be eligible for CGT

              This investment was around 10% of revenues, so I’m not aware of a reclassification of SIC code, given the proportion. Have you come across any texts that could help the case for your point 2 below? I have enough funds to cover all my liabilities, I was just enquiring whether the crypto trade loss would reduce them.

              For point 1 below, I came across the electric car incentive and one of them was being ‘tax deductible’, if purchasing the car for business purposes, I assumed (possibly incorrectly) if the car was £50k, you can claim back £10k in VAT. Applying the same principle of a tax deductible asset purchase to a trading loss led to my conclusion.


              Originally posted by malvolio View Post
              Well yes, clearly the OP does. However, briefly:

              1. VAT has nothing to do with it. Why do you think it does?

              2. CT is charged on profits. If you've made a loss then yes, it will have an impact on the CT due.

              3. Be careful YourCo doesn't get reclassified as an investment vehicle: always possible if your speculating with its money. If it does, your tax position will be a whole lot worse.

              4. What else don't you know?

              Comment


                #8
                Do you have an accountant?
                'CUK forum personality of 2011 - Winner - Yes really!!!!

                Comment


                  #9
                  Originally posted by northernladuk View Post
                  Do you have an accountant?
                  I rather hope not....

                  OP - we can't answer, we don't know enough. But if you're working on the belief that: having a Mickey Mouse company creates a magic money tree, you're in the wrong job.

                  Get professional advice.
                  Blog? What blog...?

                  Comment


                    #10
                    Would appreciate your insights on my first paragraph, ie investment loss can only be offset against an investment gain, and not corporation tax. The professional advice I have sought from two accountants: one agrees with the above, and the other conflicts stating I can offset against Corp tax. I’m now left confused, hence my post.

                    Originally posted by malvolio View Post
                    I rather hope not....

                    OP - we can't answer, we don't know enough. But if you're working on the belief that: having a Mickey Mouse company creates a magic money tree, you're in the wrong job.

                    Get professional advice.

                    Comment

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