His earnings for the past few years have been very low so the loss cannot be set off against past years. He has no other income in the current year to set the loss against. If he starts up in business with a partner in a different pub, can this be classed as "future profits of the same trade"?
The tax return has not yet been filed showing the loss for his self employment.
Also - if he deregisters for VAT when leaving the current pub, should the reason be "turnover below the threshold" rather than "ceased trading" if the loss can be set against profits from the new pub ????
Helen T
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In my opinion you may have to register the new pub partnership from day one. Is this not a transfer of a going concern? This would mean the requirement of the new partnership to register would be based on the previous owners of the business which I assume was more than the VAT registration limit. Your client will need to cancell his current VAt registration and reapply in the name of the new partnership.
Although both businesses are pubs. the are completely separate entities. I do not believe the Revenue will allow you to carry forward trading losses from the old pub against profits from the new partnership. You will be able to offset losses from the first pub against profits arising from the second pub in the same tax year.