trading as limited company in UK

[malaguti]

firstly, there should be no ambiguity here.....either you can net different revenue streams or you can't

Agreed, you think you can, I and a couple of others think you can't
this would be governed by the HMRC rulebook irregardless of who agrees or disagrees on the forum

agreed again. the only "proof" is in their assessment not mine, not yours..seems we're agreeing on a few things already

in terms of seeking advice, anyone can seek advice from a professional accountant. how you interpret my opinion to suggest that i dont advocate seeking advise is a bit of a stretch.

not really, as you need proof from me. I'm not sending in a CT600 for a fictitious company, neither are you so who is really qualified to offer any sort of advice? not me, not you. an accountant or possibly HMRC themselves but personally I wouldn't be going direct to HMRC potentially knowing i was carrying on two different businesses within the same umbrella

i am able to admit when i am wrong, i am simply asking you to show me the basis of where you have formulated your opinion so that i can revise my own.

that isn't quite what you asked. the basis of my opinion simply comes from having studied corporate law, and having worked with the likes of GE and Pfizer who have incorporated in the likes of Ireland and Belgium and Panama with the sole intention of avoiding tax wherever they can. It certainly wasn't for the exotic locations. the other basis of my opinion comes from personally having to prepare CT600s for two different companies
what you asked was proof..like I have to give you or anyone else proof. likewise what proof should I expect from you. its your opinion, thats all and I'm happy to take it as such, rather than becoming a pissing contest and asking for proof.
I'm also more than happy to revise my opinion, but I'd only have it revised if HMRC would like to confirm it. I also wouldn't expect you to revise your opinion on the education (which I can't prove) from a random guy called malaguti on the internet, despite how knowledgeable he may think he is :cheesy:

what is fact is that companies can trade with more than one SIC code (standard industry classification) and can operate under multiple trading names for different business as a pass through back to a single legal entity. these facts would contradict your claim that a company with a defined beneficial shareholder structure cannot net out different revenue streams. i still cannot find this in the HMRC rulebook. moreoever, if it is not in the HMRC rulebook, then the HMRC cannot enforce it bc it becomes a subjective matter which a company can legally appeal.

unfortunately I don't have their rulebook

another example would be if a big IT company has an expensive real estate lease but then decides to take out a loan to buy the building instead of leasing out the office space. then it decides to rent out extra office space to other companies. how would you apply your interpretation of netting different revenue streams in this case if the building goes onto the IT company's balance sheet?

another example is, if a company makes 100k by doing IT consultant services...but then makes another 50k doing plumbing....the HMRc will tax the additional 50k of plumbing proceeds at the higher tax bracket if the shareholders want to take out a dividend bc they will require the company to report in the operating year a total of 150k in total profits. the hmrc wont say, bc the 50k was a different revenue stream you can get taxed at the lower bracket as if it were a completely separate business. iT all comes down to beneficial ownership.

what i thought was a healthy informative discusision has turned out to be one where you are now back pedalling from your argument by trying to subtly mark me as having bad intentions.

not really, what was one opinion over another soon turns into a childish p1ssing contest one of which i'm not going to bother with (yes if it keeps you happy I am backtracking, I am running with my tail between my legs, you can now feel content in your self esteem), like i say simply because your opinion differs from mine and i'm not the one sending in a CT600 for a trading company. I have nothing to prove and I don't ask the same from you.
I do on the other hand have to submit in two CT600s this weekend for two different businesses and they are entirely different. why do you think i might have to do that?

best of luck to you

and to you ballsofgold

 

[ballsofgold]

and to you ballsofgold

this is not a pissing contest,
i am simply asking
where in the rulebook does it say you can't net various revenue streams to passback to a single entity and where was your basis from the rulebook of which your formed your opinion? if you studied corporate law, you should be used to questions like this....it is asimple and fairquestion. my proof is that companies can trade with more than one SIC code and can trade with more than one name for different business models. you can verify this in the hmrc rulebook

i respect the fact that you are declining to answer which is basically you saying that you don't really know the answer but next time be prepared when you tell somebody they are wrong

and it does make sense why you incorrectly applied "lifting the veil"bc your reference is pfizer using ring-fenced entities to avoid tax....this is not a tax avoidance case bc all gross revenue is reported correctly in an onshore entity. the question is: you can net them or does it always have to be reported on a gross basis as per revenue stream under a single entity

on the ct600 is asks for net proft on line item 165

nowhere does it ask for you to itemize your turnover line by line

 

[malaguti]

this is not a pissing contest,
i am simply asking
where in the rulebook does it say you can't net various revenue streams to passback to a single entity and where was your basis from the rulebook of which your formed your opinion? if you studied corporate law, you should be used to questions like this....it is asimple and fairquestion. my proof is that companies can trade with more than one SIC code and can trade with more than one name for different business models. you can verify this in the hmrc rulebook

i respect the fact that you are declining to answer which is basically you saying that you don't really know the answer but next time be prepared when you tell somebody they are wrong

and it does make sense why you incorrectly applied "lifting the veil"bc your reference is pfizer using ring-fenced entities to avoid tax....this is not a tax avoidance case bc all gross revenue is reported correctly in an onshore entity. the question is: you can net them or does it always have to be reported on a gross basis as per revenue stream under a single entity

on the ct600 is asks for net proft on line item 165

nowhere does it ask for you to itemize your turnover line by line

this from HMRC


Trading losses can be offset, in the current year, or previous tax year, against other income, unless any of the restrictions below apply.

The key restrictions cover non-commercial activities, tax avoidance using capital allowances, post cessation receipts, agricultural expenses, partnerships and leasing.

An unrelieved trade loss may also be used to offset capital gains.

Early years

Losses in the first 4 years of trade can be carried back against other income of the 3 previous years.
If a new loss-making trade commences it may be sensible to prepare separate accounts for it rather than to combine it with an existing business in order to isolate its opening year losses. In this way opening year losses can be carried back 3 years against total income.
Cash accounting (simplified accounting): there is no carry back or sideways relief for trade losses.
Carry forward and back

Trading losses can be:

Carried forwards against the profits of the same trade.
Carried back against income from the previous tax year.
Trading losses incurred in 2008/09 and 2009/10 could be carried back 3 years, but only against profits of the same trade.
Cash accounting (simplified accounting): there is no carry back or sideways relief for trade losses.

I hope you can see the common theme here...are we done now?

 

[ballsofgold]

this from HMRC


Trading losses can be offset, in the current year, or previous tax year, against other income, unless any of the restrictions below apply.

The key restrictions cover non-commercial activities, tax avoidance using capital allowances, post cessation receipts, agricultural expenses, partnerships and leasing.

An unrelieved trade loss may also be used to offset capital gains.

Early years

Losses in the first 4 years of trade can be carried back against other income of the 3 previous years.
If a new loss-making trade commences it may be sensible to prepare separate accounts for it rather than to combine it with an existing business in order to isolate its opening year losses. In this way opening year losses can be carried back 3 years against total income.
Cash accounting (simplified accounting): there is no carry back or sideways relief for trade losses.
Carry forward and back

Trading losses can be:

Carried forwards against the profits of the same trade.
Carried back against income from the previous tax year.
Trading losses incurred in 2008/09 and 2009/10 could be carried back 3 years, but only against profits of the same trade.
Cash accounting (simplified accounting): there is no carry back or sideways relief for trade losses.

I hope you can see the common theme here...are we done now?

far done unfortunately

you have copied and pasted outlined information from this website:

http://www.rossmartin.co.uk/self-employed/tax-planning-a-compliance/209-trade-losses

when i read your source i can conclude the following:

in the same tax year or previous tax year, you can net off other income from different revenue streams as long as certain restrictions are not met. if you roll losses further back than 3 years, then you can only do so against income of the same trade, not any other income...you must have missed that point

we can go into those restrictions later...but for now we can deem running a trading business and an IT business, for example, both as commercial activities - so let's move on

Trading losses can be offset, in the current year, or previous tax year, against other income, unless any of the restrictions below apply.

The key restrictions cover non-commercial activities, tax avoidance using capital allowances, post cessation receipts, agricultural expenses, partnerships and leasing.

An unrelieved trade loss may also be used to offset capital gains.[/COLOR]

If you, however, use the cash accounting method which means you realize losses when they occur as opposed to accrual accounting which means you can defer losses or profits on a schedule basis, then you cannot roll losses forward, backwards or sideways against other income. but in this case we are using accrual accounting not cash accounting

Early years
•Losses in the first 4 years of trade can be carried back against other income of the 3 previous years.
•If a new loss-making trade commences it may be sensible to prepare separate accounts for it rather than to combine it with an existing business in order to isolate its opening year losses. In this way opening year losses can be carried back 3 years against total income.
•Cash accounting (simplified accounting): there is no carry back or sideways relief for trade losses.


here are example restrictions taken from the link:

Restrictions
•Restriction on relief for uncommercial trades such as hobbies and non-commercial activities such as horse racing: there is no relief for trade losses unless activities are undertaken on a commercial basis with a view to realising profits.
•Farming and market gardening: restriction if the trade has been making losses in each of the 5 preceding years. This applies even if the activities are undertaken on a commercial basis. See Restriction on relief for uncommercial trades.
•Sideways loss relief (relief against other income or profits) may be restricted if tax avoidance is a motive (applies to certain trades; ring fence income, commodity futures and exploitation of films)
•Restrictions apply to partnership losses to the extent that sideways loss relief is restricted for non-working partnerships.
•Members of limited partnerships and LLPs have their losses restricted to the extent of their capital contribution.
•From 6 April 2013 certain reliefs, including loss reliefs, are capped at the higher of £50,000 or 25% of adjusted net income. See Limit (cap) on income tax reliefs



I reference the below information taken from the ACCA's website which is a more credible source. My reference would indicate that you CAN net off different revenue sources as long as you apply the rules accordingly. the main point is you are allowed to net losses against general income but in 2014 they put a cap of £50,000 in one calendar year but you have up to 3 years to do it...

my suggestion would be for you to look at the examples to explain it to you in layman's terms

http://www.accaglobal.com/uk/en/tec...ces-search/2014/january/tax-relief-limit.html

Finance Act 2013, Schedule 3 has introduced a limit to certain income tax reliefs available to reduce an individual’s adjusted total income for a tax year.

The limit is set at the greater of £50,000 or 25 per cent of the individual’s adjusted total income for a tax year.

The limit has effect from the tax year 2013/14 onwards and applies to the following:
trade loss relief: available against general income for losses made by an individual carrying on a trade, profession or vocation (section 64 Income Tax Act 2007 (ITA));
early trade losses relief: available to an individual in the first four years of the trade, profession or vocation (section 72 ITA);
post-cessation trade relief (section 96 ITA);
property loss relief against general income (section 120 ITA), including post-cessation property relief (section 125 ITA);
employment loss relief (section 128 ITA) for former employees’ deductions for liabilities (section 555 Income Tax (Earnings and Pensions) Act 2003);
qualifying loan interest (chapter 1 Part 8 ITA);
share loss relief of certain qualifying shares (chapter 6 Part 4 ITA);
losses on deeply discounted securities (section 446-448 and section 453-456 Income Tax (Trading and Other Income) Act 2005).

The limit does not apply to a relief in the following circumstances:
to the extent that the relief is attributable to business renovation allowances;
to deductions for trade or property loss relief (or post-cessation trade or property relief) made from profits of the same trade or property business;
to the extent that trade loss relief is attributable to the deduction of overlap relief;
to deductions for share loss relief where the shares are qualifying shares for Enterprise Investment Scheme/Seed Enterprise Investment Scheme.

Adjusted total income is calculated as follows:

Step 1

Take the amount of the taxpayer’s total income for the tax year.

Step 2

Add back the amounts of any deductions allowed under Part 12 of ITEPA 2003 (payroll giving) in calculating the taxpayer’s income which is charged to tax for the tax year.

Step 3

If the taxpayer is given relief in accordance with section 192 of Finance Act 2004 (pension schemes: relief at source) in respect of any contribution paid in the tax year under a pension scheme, deduct the gross amount of the contribution (the 'gross' amount of a contribution is the amount of the contribution before deduction of tax under section 192(1) of FA 2004).

Step 4

If the taxpayer is entitled to a deduction for relief under section 193(4) or 194(1) of FA 2004 (pension schemes: excess relief under net payment arrangements or relief on making a claim) for the tax year, deduct the amount of the excess or contribution (as the case may be).

The amount arrived at as a result of following steps 1 to 4 is the taxpayer’s ‘adjusted total income for the tax year’.

If available loss reliefs exceed the limit, then consideration has to be given as to how to apply the reliefs. It is advisable to prioritise loan interest relief as this cannot be used in another year. The only time when excess loan interest may be carried forward to subsequent tax years as a trade loss, and offset against future profits of the same trade, is where the loan interest has been paid for the purposes of a partnership trade or profession.



EXAMPLE 1:

Thom started his business as a florist on 6 April 2013. Due to an annual investment allowance claim, his first year loss is £100,000. Tom’s salary in the previous three tax years was as follows:

2010/11 - £25,000

2011/12 - £27,000 plus bonus £50,000: total £77,000

2012/13 - £30,000.

Thom wants to carry back the loss under s.72 ITA 2007.

Under the new regime, the loss carry back is as follows:

2010/11 - £25,000 (as the available loss relief is the greater of £50,000 and £6,250 (25 per cent of £25,000).

2011/12 - £50,000 (as the available loss relief is limited to £50,000, being the greater of £50,000 and £19,250 (25 per cent of £77,000).

2012/13 - £25,000 (the loss remaining, following the claims above).


Under the old regime Tom would have been able to utilise the whole loss by 2011/12.



EXAMPLE 2:

Paul has trade losses in 2014-15 of £300,000. Paul’s other income in the previous two tax years was as follows:

2013/14 - profits from the same trade of £60,000, employment income £110,000

2014/15 - employment income £110,000.

For 2013/14 loss relief against general income is capped at £50,000 (being the higher of £50,000 and £42,500 (25 per cent of £170,000). However, the loss carry back against profit of the same trade is uncapped, so Paul would be able to carry back £60,000 of 2014/15 and set it off against the profit of the same trade.

For 2014/15 loss relief against general income is capped at £50,000 (being the higher of £50,000 and £27,500 (25 per cent of £110,000).

Paul makes a claim to set £50,000 trade loss relief against his 2014/15 general income and to carry back £60,000 (uncapped, as it is relief against profit of the same trade) against 2013/14. He also claims £50,000 carried back against his general income in 2013/14.

Paul’s income chargeable to tax in 2013/14 and 2014/15 is as follows:

2013/14

Income - £170,000 (£60,000 + £110,000)

Less: 2014/15 trade loss relief against same trade (uncapped) - £60,000

Less: 2014/15 trade loss relief against other income (capped) - £50,000

Equals: income chargeable to tax - £ 60,000

2014/15

Income - £110,000

Less: sideways trade loss relief (capped) - £50,000

Equals: income chargeable to tax - £60,000



Example 3:

Mary has losses from a property rental business of £175,000 in 2013/14 and £100,000 in 2014/15. Mary’s other income in 2013/14 and 2014/15 is £600,000.

Mary’s loss relief claims in 2013/14 and 2014/15 are as follows:

2013/14

Income - £600,000

Losses from property rental business - £175,000

Relief is capped at £150,000 (being the higher of £50,000 and £150,000 (25 per cent of £600,000).

Mary can relieve £150,000 of her property losses in 2013/14, leaving £25,000 unrelieved. As the provisions for property loss relief enable claims in the same or next tax year, she is able to offset (subject to how much 2014/15 cap she utilises) the remaining 2013/14 loss relief of £25,000 against her 2014/15 income.

2014/15

Income - £600,000

Losses from property business - £100,000

Relief against other income is capped at £150,000 (being the higher of £50,000 and £150,000 (25 per cent of £600,000).

Mary can fully claim loss relief of £100,000 arising from her property business in 2014/15 plus the loss carry forward from 2013/14, ie £25,000 against her general income, as together this total is less than £150,000 (25 per cent of £600,000).




LASTLY, i reference the primary source, not secondary sources, which would be the HMRC rulebook itself:

http://www.hmrc.gov.uk/manuals/ctmanual/ctm04500.htm


CTM04505 - Corporation Tax: trading losses - relief against total profits: Introduction

CTA10/S37

Relief for a company’s trading losses against other profits is at CTA10/S37. For other ways of giving relief for losses see CTM04050.

A company can claim to set off trading losses against its total profits:
•of the accounting period in which the loss was incurred, and
•if the claim requires, to carry back the losses against profits of preceding accounting periods (CTM04510).

So far as possible claims should be made in the company’s CTSA return (CTM90600+). For claims see CTM04580 and for accepting a late claim see CTM04590.

Relief is given against total profits, including chargeable gains. A company cannot choose to restrict the claim to cover only particular items of income or gains.

A claim may be only to set-off losses against profits of a current accounting period, or it may be to set off losses against profits of the current period, and then to carry back any balance of unused losses against profits of preceding accounting periods. A company cannot claim to carry back losses without first setting them off against profits of the current period.

Losses of an earlier accounting period, where these are claimed, are relieved before losses of a later accounting period. There is an example at CTM04550.

See CTM06300+ about the disallowance of trading losses carried back under CTA10/S37 where there has been a change in ownership of a company (CTA10/S673).

See CTM41215 for guidance on the set-off of deficiencies of trade protection associations for earlier years.

 

[malaguti]

far done unfortunately

you have copied and pasted outlined information from this website:

http://www.rossmartin.co.uk/self-employed/tax-planning-a-compliance/209-trade-losses

when i read your source i can conclude the following:

in the same tax year or previous tax year, you can net off other income from different revenue streams as long as certain restrictions are not met. if you roll losses further back than 3 years, then you can only do so against income of the same trade, not any other income...you must have missed that point

we can go into those restrictions later...but for now we can deem running a trading business and an IT business, for example, both as commercial activities - so let's move on

Trading losses can be offset, in the current year, or previous tax year, against other income, unless any of the restrictions below apply.

The key restrictions cover non-commercial activities, tax avoidance using capital allowances, post cessation receipts, agricultural expenses, partnerships and leasing.

An unrelieved trade loss may also be used to offset capital gains.[/COLOR]

If you, however, use the cash accounting method which means you realize losses when they occur as opposed to accrual accounting which means you can defer losses or profits on a schedule basis, then you cannot roll losses forward, backwards or sideways against other income. but in this case we are using accrual accounting not cash accounting

Early years
•Losses in the first 4 years of trade can be carried back against other income of the 3 previous years.
•If a new loss-making trade commences it may be sensible to prepare separate accounts for it rather than to combine it with an existing business in order to isolate its opening year losses. In this way opening year losses can be carried back 3 years against total income.
•Cash accounting (simplified accounting): there is no carry back or sideways relief for trade losses.


here are example restrictions taken from the link:

Restrictions
•Restriction on relief for uncommercial trades such as hobbies and non-commercial activities such as horse racing: there is no relief for trade losses unless activities are undertaken on a commercial basis with a view to realising profits.
•Farming and market gardening: restriction if the trade has been making losses in each of the 5 preceding years. This applies even if the activities are undertaken on a commercial basis. See Restriction on relief for uncommercial trades.
•Sideways loss relief (relief against other income or profits) may be restricted if tax avoidance is a motive (applies to certain trades; ring fence income, commodity futures and exploitation of films)
•Restrictions apply to partnership losses to the extent that sideways loss relief is restricted for non-working partnerships.
•Members of limited partnerships and LLPs have their losses restricted to the extent of their capital contribution.
•From 6 April 2013 certain reliefs, including loss reliefs, are capped at the higher of £50,000 or 25% of adjusted net income. See Limit (cap) on income tax reliefs



I reference the below information taken from the ACCA's website which is a more credible source. My reference would indicate that you CAN net off different revenue sources as long as you apply the rules accordingly. the main point is you are allowed to net losses against general income but in 2014 they put a cap of £50,000 in one calendar year but you have up to 3 years to do it...

my suggestion would be for you to look at the examples to explain it to you in layman's terms

http://www.accaglobal.com/uk/en/tec...ces-search/2014/january/tax-relief-limit.html

Finance Act 2013, Schedule 3 has introduced a limit to certain income tax reliefs available to reduce an individual’s adjusted total income for a tax year.

The limit is set at the greater of £50,000 or 25 per cent of the individual’s adjusted total income for a tax year.

The limit has effect from the tax year 2013/14 onwards and applies to the following:
trade loss relief: available against general income for losses made by an individual carrying on a trade, profession or vocation (section 64 Income Tax Act 2007 (ITA));
early trade losses relief: available to an individual in the first four years of the trade, profession or vocation (section 72 ITA);
post-cessation trade relief (section 96 ITA);
property loss relief against general income (section 120 ITA), including post-cessation property relief (section 125 ITA);
employment loss relief (section 128 ITA) for former employees’ deductions for liabilities (section 555 Income Tax (Earnings and Pensions) Act 2003);
qualifying loan interest (chapter 1 Part 8 ITA);
share loss relief of certain qualifying shares (chapter 6 Part 4 ITA);
losses on deeply discounted securities (section 446-448 and section 453-456 Income Tax (Trading and Other Income) Act 2005).

The limit does not apply to a relief in the following circumstances:
to the extent that the relief is attributable to business renovation allowances;
to deductions for trade or property loss relief (or post-cessation trade or property relief) made from profits of the same trade or property business;
to the extent that trade loss relief is attributable to the deduction of overlap relief;
to deductions for share loss relief where the shares are qualifying shares for Enterprise Investment Scheme/Seed Enterprise Investment Scheme.

Adjusted total income is calculated as follows:

Step 1

Take the amount of the taxpayer’s total income for the tax year.

Step 2

Add back the amounts of any deductions allowed under Part 12 of ITEPA 2003 (payroll giving) in calculating the taxpayer’s income which is charged to tax for the tax year.

Step 3

If the taxpayer is given relief in accordance with section 192 of Finance Act 2004 (pension schemes: relief at source) in respect of any contribution paid in the tax year under a pension scheme, deduct the gross amount of the contribution (the 'gross' amount of a contribution is the amount of the contribution before deduction of tax under section 192(1) of FA 2004).

Step 4

If the taxpayer is entitled to a deduction for relief under section 193(4) or 194(1) of FA 2004 (pension schemes: excess relief under net payment arrangements or relief on making a claim) for the tax year, deduct the amount of the excess or contribution (as the case may be).

The amount arrived at as a result of following steps 1 to 4 is the taxpayer’s ‘adjusted total income for the tax year’.

If available loss reliefs exceed the limit, then consideration has to be given as to how to apply the reliefs. It is advisable to prioritise loan interest relief as this cannot be used in another year. The only time when excess loan interest may be carried forward to subsequent tax years as a trade loss, and offset against future profits of the same trade, is where the loan interest has been paid for the purposes of a partnership trade or profession.



EXAMPLE 1:

Thom started his business as a florist on 6 April 2013. Due to an annual investment allowance claim, his first year loss is £100,000. Tom’s salary in the previous three tax years was as follows:

2010/11 - £25,000

2011/12 - £27,000 plus bonus £50,000: total £77,000

2012/13 - £30,000.

Thom wants to carry back the loss under s.72 ITA 2007.

Under the new regime, the loss carry back is as follows:

2010/11 - £25,000 (as the available loss relief is the greater of £50,000 and £6,250 (25 per cent of £25,000).

2011/12 - £50,000 (as the available loss relief is limited to £50,000, being the greater of £50,000 and £19,250 (25 per cent of £77,000).

2012/13 - £25,000 (the loss remaining, following the claims above).


Under the old regime Tom would have been able to utilise the whole loss by 2011/12.



EXAMPLE 2:

Paul has trade losses in 2014-15 of £300,000. Paul’s other income in the previous two tax years was as follows:

2013/14 - profits from the same trade of £60,000, employment income £110,000

2014/15 - employment income £110,000.

For 2013/14 loss relief against general income is capped at £50,000 (being the higher of £50,000 and £42,500 (25 per cent of £170,000). However, the loss carry back against profit of the same trade is uncapped, so Paul would be able to carry back £60,000 of 2014/15 and set it off against the profit of the same trade.

For 2014/15 loss relief against general income is capped at £50,000 (being the higher of £50,000 and £27,500 (25 per cent of £110,000).

Paul makes a claim to set £50,000 trade loss relief against his 2014/15 general income and to carry back £60,000 (uncapped, as it is relief against profit of the same trade) against 2013/14. He also claims £50,000 carried back against his general income in 2013/14.

Paul’s income chargeable to tax in 2013/14 and 2014/15 is as follows:

2013/14

Income - £170,000 (£60,000 + £110,000)

Less: 2014/15 trade loss relief against same trade (uncapped) - £60,000

Less: 2014/15 trade loss relief against other income (capped) - £50,000

Equals: income chargeable to tax - £ 60,000

2014/15

Income - £110,000

Less: sideways trade loss relief (capped) - £50,000

Equals: income chargeable to tax - £60,000



Example 3:

Mary has losses from a property rental business of £175,000 in 2013/14 and £100,000 in 2014/15. Mary’s other income in 2013/14 and 2014/15 is £600,000.

Mary’s loss relief claims in 2013/14 and 2014/15 are as follows:

2013/14

Income - £600,000

Losses from property rental business - £175,000

Relief is capped at £150,000 (being the higher of £50,000 and £150,000 (25 per cent of £600,000).

Mary can relieve £150,000 of her property losses in 2013/14, leaving £25,000 unrelieved. As the provisions for property loss relief enable claims in the same or next tax year, she is able to offset (subject to how much 2014/15 cap she utilises) the remaining 2013/14 loss relief of £25,000 against her 2014/15 income.

2014/15

Income - £600,000

Losses from property business - £100,000

Relief against other income is capped at £150,000 (being the higher of £50,000 and £150,000 (25 per cent of £600,000).

Mary can fully claim loss relief of £100,000 arising from her property business in 2014/15 plus the loss carry forward from 2013/14, ie £25,000 against her general income, as together this total is less than £150,000 (25 per cent of £600,000).




LASTLY, i reference the primary source, not secondary sources, which would be the HMRC rulebook itself:

http://www.hmrc.gov.uk/manuals/ctmanual/ctm04500.htm


CTM04505 - Corporation Tax: trading losses - relief against total profits: Introduction

CTA10/S37

Relief for a company’s trading losses against other profits is at CTA10/S37. For other ways of giving relief for losses see CTM04050.

A company can claim to set off trading losses against its total profits:
•of the accounting period in which the loss was incurred, and
•if the claim requires, to carry back the losses against profits of preceding accounting periods (CTM04510).

So far as possible claims should be made in the company’s CTSA return (CTM90600+). For claims see CTM04580 and for accepting a late claim see CTM04590.

Relief is given against total profits, including chargeable gains. A company cannot choose to restrict the claim to cover only particular items of income or gains.

A claim may be only to set-off losses against profits of a current accounting period, or it may be to set off losses against profits of the current period, and then to carry back any balance of unused losses against profits of preceding accounting periods. A company cannot claim to carry back losses without first setting them off against profits of the current period.

Losses of an earlier accounting period, where these are claimed, are relieved before losses of a later accounting period. There is an example at CTM04550.

See CTM06300+ about the disallowance of trading losses carried back under CTA10/S37 where there has been a change in ownership of a company (CTA10/S673).

See CTM41215 for guidance on the set-off of deficiencies of trade protection associations for earlier years.

sorry mate, you're quoting income tax regulations

 

[ballsofgold]

sorry mate, you're quoting income tax regulations

dude i am starting to think you are a douche

you quoted self employment rules first
so i quoted income tax rules for people run sole trader and employment at the same time

then i also copied and pasted hmrc corporation tax which confirms you can net off losses and profits

you just dont want to admit you are wrong

 

[forker]

 

[malaguti]

dude i am starting to think you are a douche

you quoted self employment rules first
so i quoted income tax rules for people run sole trader and employment at the same time

then i also copied and pasted hmrc corporation tax which confirms you can net off losses and profits

you just dont want to admit you are wrong

mate, we are talking about a business, self employed can also relate to small businesses. bringing schedule E into this means absolutely nothing.
I've quoted where you can't. relating to corporation tax
you have simply copied loads of irrelevant stuff related to income tax.

mate, im done. Ive given you a source, from accountants/tax advisors database and you've ignored it quoting primary grade acca material.
i'll leave it to the OP to decide whether he should seek advice

 

[malaguti]

far done unfortunately

you have copied and pasted outlined information from this website:

http://www.rossmartin.co.uk/self-employed/tax-planning-a-compliance/209-trade-losses

when i read your source i can conclude the following:

in the same tax year or previous tax year, you can net off other income from different revenue streams as long as certain restrictions are not met. if you roll losses further back than 3 years, then you can only do so against income of the same trade, not any other income...you must have missed that point

we can go into those restrictions later...but for now we can deem running a trading business and an IT business, for example, both as commercial activities - so let's move on

Trading losses can be offset, in the current year, or previous tax year, against other income, unless any of the restrictions below apply.

The key restrictions cover non-commercial activities, tax avoidance using capital allowances, post cessation receipts, agricultural expenses, partnerships and leasing.

An unrelieved trade loss may also be used to offset capital gains.[/COLOR]

If you, however, use the cash accounting method which means you realize losses when they occur as opposed to accrual accounting which means you can defer losses or profits on a schedule basis, then you cannot roll losses forward, backwards or sideways against other income. but in this case we are using accrual accounting not cash accounting

Early years
•Losses in the first 4 years of trade can be carried back against other income of the 3 previous years.
•If a new loss-making trade commences it may be sensible to prepare separate accounts for it rather than to combine it with an existing business in order to isolate its opening year losses. In this way opening year losses can be carried back 3 years against total income.
•Cash accounting (simplified accounting): there is no carry back or sideways relief for trade losses.


here are example restrictions taken from the link:

Restrictions
•Restriction on relief for uncommercial trades such as hobbies and non-commercial activities such as horse racing: there is no relief for trade losses unless activities are undertaken on a commercial basis with a view to realising profits.
•Farming and market gardening: restriction if the trade has been making losses in each of the 5 preceding years. This applies even if the activities are undertaken on a commercial basis. See Restriction on relief for uncommercial trades.
•Sideways loss relief (relief against other income or profits) may be restricted if tax avoidance is a motive (applies to certain trades; ring fence income, commodity futures and exploitation of films)
•Restrictions apply to partnership losses to the extent that sideways loss relief is restricted for non-working partnerships.
•Members of limited partnerships and LLPs have their losses restricted to the extent of their capital contribution.
•From 6 April 2013 certain reliefs, including loss reliefs, are capped at the higher of £50,000 or 25% of adjusted net income. See Limit (cap) on income tax reliefs



I reference the below information taken from the ACCA's website which is a more credible source. My reference would indicate that you CAN net off different revenue sources as long as you apply the rules accordingly. the main point is you are allowed to net losses against general income but in 2014 they put a cap of £50,000 in one calendar year but you have up to 3 years to do it...

my suggestion would be for you to look at the examples to explain it to you in layman's terms

http://www.accaglobal.com/uk/en/tec...ces-search/2014/january/tax-relief-limit.html

Finance Act 2013, Schedule 3 has introduced a limit to certain income tax reliefs available to reduce an individual’s adjusted total income for a tax year.

The limit is set at the greater of £50,000 or 25 per cent of the individual’s adjusted total income for a tax year.

The limit has effect from the tax year 2013/14 onwards and applies to the following:
trade loss relief: available against general income for losses made by an individual carrying on a trade, profession or vocation (section 64 Income Tax Act 2007 (ITA));
early trade losses relief: available to an individual in the first four years of the trade, profession or vocation (section 72 ITA);
post-cessation trade relief (section 96 ITA);
property loss relief against general income (section 120 ITA), including post-cessation property relief (section 125 ITA);
employment loss relief (section 128 ITA) for former employees’ deductions for liabilities (section 555 Income Tax (Earnings and Pensions) Act 2003);
qualifying loan interest (chapter 1 Part 8 ITA);
share loss relief of certain qualifying shares (chapter 6 Part 4 ITA);
losses on deeply discounted securities (section 446-448 and section 453-456 Income Tax (Trading and Other Income) Act 2005).

The limit does not apply to a relief in the following circumstances:
to the extent that the relief is attributable to business renovation allowances;
to deductions for trade or property loss relief (or post-cessation trade or property relief) made from profits of the same trade or property business;
to the extent that trade loss relief is attributable to the deduction of overlap relief;
to deductions for share loss relief where the shares are qualifying shares for Enterprise Investment Scheme/Seed Enterprise Investment Scheme.

Adjusted total income is calculated as follows:

Step 1

Take the amount of the taxpayer’s total income for the tax year.

Step 2

Add back the amounts of any deductions allowed under Part 12 of ITEPA 2003 (payroll giving) in calculating the taxpayer’s income which is charged to tax for the tax year.

Step 3

If the taxpayer is given relief in accordance with section 192 of Finance Act 2004 (pension schemes: relief at source) in respect of any contribution paid in the tax year under a pension scheme, deduct the gross amount of the contribution (the 'gross' amount of a contribution is the amount of the contribution before deduction of tax under section 192(1) of FA 2004).

Step 4

If the taxpayer is entitled to a deduction for relief under section 193(4) or 194(1) of FA 2004 (pension schemes: excess relief under net payment arrangements or relief on making a claim) for the tax year, deduct the amount of the excess or contribution (as the case may be).

The amount arrived at as a result of following steps 1 to 4 is the taxpayer’s ‘adjusted total income for the tax year’.

If available loss reliefs exceed the limit, then consideration has to be given as to how to apply the reliefs. It is advisable to prioritise loan interest relief as this cannot be used in another year. The only time when excess loan interest may be carried forward to subsequent tax years as a trade loss, and offset against future profits of the same trade, is where the loan interest has been paid for the purposes of a partnership trade or profession.



EXAMPLE 1:

Thom started his business as a florist on 6 April 2013. Due to an annual investment allowance claim, his first year loss is £100,000. Tom’s salary in the previous three tax years was as follows:

2010/11 - £25,000

2011/12 - £27,000 plus bonus £50,000: total £77,000

2012/13 - £30,000.

Thom wants to carry back the loss under s.72 ITA 2007.

Under the new regime, the loss carry back is as follows:

2010/11 - £25,000 (as the available loss relief is the greater of £50,000 and £6,250 (25 per cent of £25,000).

2011/12 - £50,000 (as the available loss relief is limited to £50,000, being the greater of £50,000 and £19,250 (25 per cent of £77,000).

2012/13 - £25,000 (the loss remaining, following the claims above).


Under the old regime Tom would have been able to utilise the whole loss by 2011/12.



EXAMPLE 2:

Paul has trade losses in 2014-15 of £300,000. Paul’s other income in the previous two tax years was as follows:

2013/14 - profits from the same trade of £60,000, employment income £110,000

2014/15 - employment income £110,000.

For 2013/14 loss relief against general income is capped at £50,000 (being the higher of £50,000 and £42,500 (25 per cent of £170,000). However, the loss carry back against profit of the same trade is uncapped, so Paul would be able to carry back £60,000 of 2014/15 and set it off against the profit of the same trade.

For 2014/15 loss relief against general income is capped at £50,000 (being the higher of £50,000 and £27,500 (25 per cent of £110,000).

Paul makes a claim to set £50,000 trade loss relief against his 2014/15 general income and to carry back £60,000 (uncapped, as it is relief against profit of the same trade) against 2013/14. He also claims £50,000 carried back against his general income in 2013/14.

Paul’s income chargeable to tax in 2013/14 and 2014/15 is as follows:

2013/14

Income - £170,000 (£60,000 + £110,000)

Less: 2014/15 trade loss relief against same trade (uncapped) - £60,000

Less: 2014/15 trade loss relief against other income (capped) - £50,000

Equals: income chargeable to tax - £ 60,000

2014/15

Income - £110,000

Less: sideways trade loss relief (capped) - £50,000

Equals: income chargeable to tax - £60,000



Example 3:

Mary has losses from a property rental business of £175,000 in 2013/14 and £100,000 in 2014/15. Mary’s other income in 2013/14 and 2014/15 is £600,000.

Mary’s loss relief claims in 2013/14 and 2014/15 are as follows:

2013/14

Income - £600,000

Losses from property rental business - £175,000

Relief is capped at £150,000 (being the higher of £50,000 and £150,000 (25 per cent of £600,000).

Mary can relieve £150,000 of her property losses in 2013/14, leaving £25,000 unrelieved. As the provisions for property loss relief enable claims in the same or next tax year, she is able to offset (subject to how much 2014/15 cap she utilises) the remaining 2013/14 loss relief of £25,000 against her 2014/15 income.

2014/15

Income - £600,000

Losses from property business - £100,000

Relief against other income is capped at £150,000 (being the higher of £50,000 and £150,000 (25 per cent of £600,000).

Mary can fully claim loss relief of £100,000 arising from her property business in 2014/15 plus the loss carry forward from 2013/14, ie £25,000 against her general income, as together this total is less than £150,000 (25 per cent of £600,000).




LASTLY, i reference the primary source, not secondary sources, which would be the HMRC rulebook itself:

http://www.hmrc.gov.uk/manuals/ctmanual/ctm04500.htm


CTM04505 - Corporation Tax: trading losses - relief against total profits: Introduction

CTA10/S37

Relief for a company’s trading losses against other profits is at CTA10/S37. For other ways of giving relief for losses see CTM04050.

A company can claim to set off trading losses against its total profits:
•of the accounting period in which the loss was incurred, and
•if the claim requires, to carry back the losses against profits of preceding accounting periods (CTM04510).

So far as possible claims should be made in the company’s CTSA return (CTM90600+). For claims see CTM04580 and for accepting a late claim see CTM04590.

Relief is given against total profits, including chargeable gains. A company cannot choose to restrict the claim to cover only particular items of income or gains.

A claim may be only to set-off losses against profits of a current accounting period, or it may be to set off losses against profits of the current period, and then to carry back any balance of unused losses against profits of preceding accounting periods. A company cannot claim to carry back losses without first setting them off against profits of the current period.

Losses of an earlier accounting period, where these are claimed, are relieved before losses of a later accounting period. There is an example at CTM04550.

See CTM06300+ about the disallowance of trading losses carried back under CTA10/S37 where there has been a change in ownership of a company (CTA10/S673).

See CTM41215 for guidance on the set-off of deficiencies of trade protection associations for earlier years.

CTM04100
For accounting periods ending on or after 30 September 1993 a company does not have to make a claim to carry forward trade losses for set-off against future trading income of the same trade.
hmm, of the same trade...

CTM04050
Relief for trading losses is available by:

carry forward of trading losses against future trading income from the same trade (CTM04100+),
hmm, from the same trade...

these are from HMRC now..read them, don't quote rubbish in return, just stick to the facts if you can..

 

[malaguti]

CTM04100
For accounting periods ending on or after 30 September 1993 a company does not have to make a claim to carry forward trade losses for set-off against future trading income of the same trade.
hmm, of the same trade...

CTM04050
Relief for trading losses is available by:

carry forward of trading losses against future trading income from the same trade (CTM04100+),
hmm, from the same trade...

these are from HMRC now..read them, don't quote rubbish in return, just stick to the facts if you can..

CTM04570 - Corporation Tax: trading losses - relief against total profits: evidence of loss
CTA10/S39
The amount of a loss incurred in a trade in any accounting period is computed in the same way as trading income from the trade in that period would have been computed (CTM04005). In theory the usual accounts and computations should be supplied as evidence in support of a loss.
hmmm, heavens above, all related to a trade..so HMRC is wrong now ballsofgold?

im done, really done. take it up with them now and when you do, quote your acca text to them. that'll swing it in your favour

 

[ballsofgold]

CTM04100
For accounting periods ending on or after 30 September 1993 a company does not have to make a claim to carry forward trade losses for set-off against future trading income of the same trade.
hmm, of the same trade...

CTM04050
Relief for trading losses is available by:

carry forward of trading losses against future trading income from the same trade (CTM04100+),
hmm, from the same trade...

these are from HMRC now..read them, don't quote rubbish in return, just stick to the facts if you can..

sorry buddy we are not done

agreed, when you carry losses FORWARD...you can only net losses against the same trade. lets move on from this

you are selectively reading to see what you want to see...what happens when you carry losses backwards or apply the loss in the same year? the rulebook clearly states that you can net off losses against other income as i wrote earlier or against total income. this would apply to businesses with multiple trading names. it also states restrictions on non-commercial activity. commercial activity is defined by the hmrc as busineess that is aimed to make a profit where losses are valued similarly to other businesses in the industry. this is the only restriction, is it commercial or non-commercial. in no other place does it say it has to be the same trade.

http://www.hmrc.gov.uk/manuals/ctmanual/CTM04050.htm

furthermore, if you look at the third bullet point, there are rules on how to net group accounts such as foreign subsidiaries and capital allowances from other companies that feed back to the same beneficial shareholder....

 

[ballsofgold]

CTM04570 - Corporation Tax: trading losses - relief against total profits: evidence of loss
CTA10/S39
The amount of a loss incurred in a trade in any accounting period is computed in the same way as trading income from the trade in that period would have been computed (CTM04005). In theory the usual accounts and computations should be supplied as evidence in support of a loss.
hmmm, heavens above, all related to a trade..so HMRC is wrong now ballsofgold?

im done, really done. take it up with them now and when you do, quote your acca text to them. that'll swing it in your favour

again, it simply states that a company does not have to roll losses forward but if they chose to, the accounting method or calculation they use to calculate the loss in the year must also be used in the future year....in other words you cant switch from accrual accounting to cash accounting

another example would be that if you have an invoice to a client from IT services which was paid, but you have a comittment to pay for expenses but did not outlay the cash, under the cash method you cannot net out the committment and must show a profit...under the accrual method you can net out the lossess against each other and show a potential loss. But if you use the accrual method, you must continue to use the accrual method....it does not mean that if you have multiple income streams that you are not allowed to net them out...

but reiterate my previous comment, as per the rulebook, if you roll losses forward you can only net out the loss from the same trade. losses that are not rolled forward must be netteed out against total income in the same ear and any leftover balance can applied to TOTAL or OTHER income in previous years which is why theCT600 only asks for net income

 

[ballsofgold]

CTM04505 - Corporation Tax: trading losses - relief against total profits: introduction
CTA10/S37
Relief for a company’s trading losses against OTHER profits is at CTA10/S37. For other ways of giving relief for losses see CTM04050.

A company can claim to set off trading losses against its TOTAL profits:

of the accounting period in which the loss was incurred, and
if the claim requires, to carry back the losses against profits of preceding accounting periods (CTM04510).
So far as possible claims should be made in the company’s CTSA return (CTM90600+). For claims see CTM04580 and for accepting a late claim see CTM04590.

Relief is given against total profits, including chargeable gains. A company cannot choose to restrict the claim to cover only particular items of income or gains.

A claim may be only to set-off losses against profits of a current accounting period, or it may be to set off losses against profits of the current period, and then to carry back any balance of unused losses against profits of preceding accounting periods. A company cannot claim to carry back losses without first setting them off against profits of the current period.

Losses of an earlier accounting period, where these are claimed, are relieved before losses of a later accounting period. There is an example at CTM04550.

See CTM06300+ about the disallowance of trading losses carried back under CTA10/S37 where there has been a change in ownership of a company (CTA10/S673).

See CTM41215 for guidance on the set-off of deficiencies of trade protection associations for earlier years.


CTM04600 - Corporation Tax: trading losses - relief against total profits: restriction of relief for uncommercial trading
CTA10/S44
CTA10/S44 disallows relief under S37(CTM04505) where a trade is not carried on:

on a commercial basis, and
with a view to the realisation of profit (CTM04610).
The object of these provisions is to deny relief for losses from activities that are clearly not carried on with the view of making profits. Do not challenge relief simply because there has been a run of trading losses. A statement made by the Chancellor of the Exchequer in the course of a parliamentary debate on this subject is at BIM75705.

The onus of proving that a trade is carried on a qualifying basis is on the claimant.

If the claimant has taken steps by the end of the accounting period to carry on the activity on a commercial basis, the provision will not operate to deny relief in respect of the loss of any part of that period.

If it is claimed that S44 does not apply because the loss making trade formed of a larger undertaking see CTM04620.

Note that the ‘uncommercial trading’ restriction does not apply where the trade is carried on in the exercise of a statutory function (for example, a marketing board created by statute).

 

[ballsofgold]

mate, we are talking about a business, self employed can also relate to small businesses. bringing schedule E into this means absolutely nothing.
I've quoted where you can't. relating to corporation tax
you have simply copied loads of irrelevant stuff related to income tax.

mate, im done. Ive given you a source, from accountants/tax advisors database and you've ignored it quoting primary grade acca material.
i'll leave it to the OP to decide whether he should seek advice

again you are not correct

self - employed can mean you operate as a sole trader in which the business is tied back to you personally in which income tax is applied and thus for the ACCA examples. you quoted self employment rules from that website, that was self employment not corporation tax....read it again

but if you operate as an ltd and not a sole trader then you have to apply corporation tax, i brought in the hmrc rulebook for this

for sole trader, the acca examples reign supreme

https://www.gov.uk/business-legal-structures/sole-trader

you are getting mixed up again, and you do realize that ACCA is the premier accounting qualification?

 

[ballsofgold]

This should settle it here:
http://www.hmrc.gov.uk/manuals/ctmanual/CTM04510.htm

Losses may be only carried back against profits of a preceding accounting period if the company was carrying on the trade (in which the loss was incurred) at some time in that accounting period. However it is not necessary for the trade to have been carried on for the whole of the preceding accounting period. If the trade was carried on at any time in an accounting period, then losses may be set-off against the profits of the whole of that accounting period.




so f you roll forward if has to be the same trade

if you roll back you can net off against other businesses so long as in the previous tax year the same trade was active at some time in that tax year

in the same tax year, you net off total income

in all cases, the business has to be commercial activity which is defined as trading for a gain in which such gains are taxable...

so bottom line is as long as you have taxBle gains you can net off against other income with some restrictions

 

[malaguti]

This should settle it here:
http://www.hmrc.gov.uk/manuals/ctmanual/CTM04510.htm

Losses may be only carried back against profits of a preceding accounting period if the company was carrying on the trade (in which the loss was incurred) at some time in that accounting period. However it is not necessary for the trade to have been carried on for the whole of the preceding accounting period. If the trade was carried on at any time in an accounting period, then losses may be set-off against the profits of the whole of that accounting period.




so f you roll forward if has to be the same trade

if you roll back you can net off against other businesses so long as in the previous tax year the same trade was active at some time in that tax year

in the same tax year, you net off total income

in all cases, the business has to be commercial activity which is defined as trading for a gain in which such gains are taxable...

so bottom line is as long as you have taxBle gains you can net off against other income with some restrictions

yes this does settle it for me thank you..
roll forward, roll back...the same trade. point clearly made well done you

 

[malaguti]

CTM04505 - Corporation Tax: trading losses - relief against total profits: introduction
CTA10/S37
Relief for a company’s trading losses against OTHER profits is at CTA10/S37. For other ways of giving relief for losses see CTM04050.

A company can claim to set off trading losses against its TOTAL profits:

of the accounting period in which the loss was incurred, and
if the claim requires, to carry back the losses against profits of preceding accounting periods (CTM04510).
So far as possible claims should be made in the company’s CTSA return (CTM90600+). For claims see CTM04580 and for accepting a late claim see CTM04590.

Relief is given against total profits, including chargeable gains. A company cannot choose to restrict the claim to cover only particular items of income or gains.

A claim may be only to set-off losses against profits of a current accounting period, or it may be to set off losses against profits of the current period, and then to carry back any balance of unused losses against profits of preceding accounting periods. A company cannot claim to carry back losses without first setting them off against profits of the current period.

Losses of an earlier accounting period, where these are claimed, are relieved before losses of a later accounting period. There is an example at CTM04550.

See CTM06300+ about the disallowance of trading losses carried back under CTA10/S37 where there has been a change in ownership of a company (CTA10/S673).

See CTM41215 for guidance on the set-off of deficiencies of trade protection associations for earlier years.


CTM04600 - Corporation Tax: trading losses - relief against total profits: restriction of relief for uncommercial trading
CTA10/S44
CTA10/S44 disallows relief under S37(CTM04505) where a trade is not carried on:

on a commercial basis, and
with a view to the realisation of profit (CTM04610).
The object of these provisions is to deny relief for losses from activities that are clearly not carried on with the view of making profits. Do not challenge relief simply because there has been a run of trading losses. A statement made by the Chancellor of the Exchequer in the course of a parliamentary debate on this subject is at BIM75705.

The onus of proving that a trade is carried on a qualifying basis is on the claimant.

If the claimant has taken steps by the end of the accounting period to carry on the activity on a commercial basis, the provision will not operate to deny relief in respect of the loss of any part of that period.

If it is claimed that S44 does not apply because the loss making trade formed of a larger undertaking see CTM04620.

Note that the ‘uncommercial trading’ restriction does not apply where the trade is carried on in the exercise of a statutory function (for example, a marketing board created by statute).

remember what we're talking about, one part of the business has made a profit, the other part a loss..so this is irrelevant, just like income tax
and why quote group companies, we are talking about the same business, not multiple business remember

 

[malaguti]

again you are not correct

self - employed can mean you operate as a sole trader in which the business is tied back to you personally in which income tax is applied and thus for the ACCA examples. you quoted self employment rules from that website, that was self employment not corporation tax....read it again

but if you operate as an ltd and not a sole trader then you have to apply corporation tax, i brought in the hmrc rulebook for this

for sole trader, the acca examples reign supreme

https://www.gov.uk/business-legal-structures/sole-trader

you are getting mixed up again, and you do realize that ACCA is the premier accounting qualification?

you are now just being obtuse..self employed
you as a director of a company pay yourself a wage..you are employed by a business. that business is taxed under CT, you personally as income tax. we are only focused on the business impact..stick to the facts

sole trader, he hasn't incorporated, everything is income tax.. come on now