cheap accountants - losses

Trading losses can be common during the early years following company formation. If you do incur a loss when trading through a limited company all is not lost. There are ways you can use this loss to your advantage.

A trading loss can be used to reduce the amount of Corporation Tax payable by your limited company. This can be achieved in a couple of ways:

1. By carrying the loss forward to offset against the profits made in future accounting periods.

2. By carrying the loss back to the preceding 12 month period.

The loss can be carried forward until it has been fully offset against future profits, allowing you to receive the full available tax benefit.

There a couple of other conditions that apply but an accountant here at CheaperAccountant.co.uk can manage this process on your behalf. This way you will ensure that you never overpay your Corporation Tax.

We are often asked if a trading loss can include salary paid to a company director and the answer is yes it can. All genuine expenses incurred by a limited company qualify as an expense.