Ltd corp tax rollover/reclaim over multiple accountancy years

[snoopy20]

Hi,

I run a business with two revenue streams, one is I.T contracting the other is in manufacturing. The latter doesn't pay so well but is growing.

During one accountancy year I had a surplus of revenue and paid 20% corporation tax on it. A few month later I would ideally have used this money (+ the 20%) on manufacturing side costs. I wasn't in a position to do this before the accountancy year was due.

It doesn't appear tax efficient to use this taxed revenue for costs, I might as well use it for a dividend and only use new money that comes in after the accountancy period. I'm pretty sure I'm missing something here, can someone explain options?

Regards, Andrew

[pr1]

Hi,

I run a business with two revenue streams, one is I.T contracting the other is in manufacturing. The latter doesn't pay so well but is growing.

During one accountancy year I had a surplus of revenue and paid 20% corporation tax on it. A few month later I would ideally have used this money (+ the 20%) on manufacturing side costs. I wasn't in a position to do this before the accountancy year was due.

It doesn't appear tax efficient to use this taxed revenue for costs, I might as well use it for a dividend and only use new money that comes in after the accountancy period. I'm pretty sure I'm missing something here, can someone explain options?

Regards, Andrew

I think you are getting confused, if you made £10k profit (revenue > spending) in year 1 and pay £2000 corporation tax, then make a £10k loss in year 2 (spending > revenue) you can claim (some of*) the CT you paid in year 1 back. So other than cashflow, there should be no reason not to spend "taxed revenue" on costs, it will all balance


(*the corporation tax %s may change in between years)

[snoopy20]

This is what I thought, I just don't understand the process fully.

So if I make 10k and pay 2k tax, leaving 8k, then I spend 10k the next financial year leaving -2k, which I claim back, then the 2k difference has to be by some way of loan until the corp tax is recovered. Is this right? I'd bee happy to loan the company 2k at 0% if that's the simplest way.

Thanks!

Andrew

[Lance]

This is what I thought, I just don't understand the process fully.

Get an accountant.

[northernladuk]

Do you pay yourself around 8k and the rest dividends?

[snoopy20]

It would be great if d**k head comments can be avoided and sticking to the question at hand. PAYE and dividends are irrelevant here.

Thanks PR1 for a solid answer.

[Lance]

It would be great if d**k head comments can be avoided and sticking to the question at hand. PAYE and dividends are irrelevant here.

Thanks PR1 for a solid answer.

Hi Andrew,

If you don’t understand your situation, and are advised to get an accountant, that is good advice.

If you suggest that the person advising that is a dickhead, then you are a ******* tool.

Yours sincerely,
dickhead

[MrButton]

Get an accountant.

This is the best advice you can get. As you already admitted you don’t understand the process so precessional advice should be sought.

Getting annoyed that people aren’t telling you exactly what you need for free is a bit of a knob move.