We were working on a project which was meant to go over a year with several payment stages. The project got pulled by the client within 2 months though.
Although the client paid some towards the overall projects, we did not get paid for all the work we did and had to absorb a substantial loss.
Is this something that can be taking into consideration with our profit and loss and hence reduce our corporation tax?
Thanks
Nathalie
Replies (3)
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Maybe - but you're never going to be able to put enough information on a forum like this to get a definitive answer. Too many issues to consider .....
Not exactly
"Some" received from client = Income
Costs actually incurred = Expenditure.
If Expenditure exceeds Income, you will have made a loss on the project, but it is not shown separately in the accounts. The income and expenditure on this project will be included in the total figures for your entire business.