Company loss

[doberden]

Hi,

I work as a PAYE worker but have a company on the side. Can you let me know if you make a loss through a company can you offset that loss agains PAYE tax. Wishful thinking but it's worth a shot!

 

[Brendan Burgess]

No, I don't think you can.

Have you created the loss by paying yourself a salary from the company? If so, you should not be paying yourself a salary which is taxable, while the company gets no benefit from the losses.

You can carry the company losses forward against future profits.

Brendan

 

[doberden]

Nope, it's a start up company with a good bit of initial setting up expense. I didn't pay a salary to myself.


Thanks for the reply.

 

[deadlyduck]

If you set the side business up as a sole trader instead of a limited company I think you could then set the loss against your other (ie PAYE) income and thereby reduce your tax bill.
However, sole traders ( as opposed to limited companies) face unlimited liability so if the business went bad, you would be personally responsible for paying the creditors.
Check with your accountant if I'm right in the above and whether it's worth taking this course of action