Write off of initial franchise fee before period ends as no ongoing value, can losses created be used against future trading?
My client bought a 5 yr training franchise, with upfront payment, which we were writing off over the 5 yr period of the franchise. My client operates as a limited company 'x' ltd trading as 'y' franchise.
After 18 months he was getting no income or business via the 'y' franchise and has written to the franchisor saying that he wishes no longer to use the franchise name. The client is trying to get similar work though his own name and contacts but no longer wants to be tied into paying the franchisor the monthly %age of all income when it is not derived through the franchise.
A verbal agreement has been made with the franchisor that my client can cease to operate under the name, but there is no real prospect of my client getting any of his initial investment back.
I therefore wish to write off the remaining franchise value at the end of the 2nd yr as its UEL is now over. This will create a fairly large loss. (There are already losses brought forward but there are no creditors except for a directors loan so I am not too worried about the trading insolvently aspect.)
Can the loss created be carried forward against future training profits even though they will have nothing to do with the original cost that we are writing off? I would assume it can as it is part of the same trade but would be grateful for confirmation.
- What should I charge for unlimited advice and support ? 103 4
- Builder - Roll over relief 167 8
- Sale of Van to a Guernsey company and VAT 89 2
- deleted 415 22
- Director forgot to take salary for 2013/2014 696 8
- Accountancy Software Recommendation for eCommerce Business 59 1
- PII and previous accountant 100 3
- Use of aliases 409 14
- What's the plural? 176 4
- Client leaving and querying previous years accounts 613 25
- Awkward insolvency practitioner 84 1
- Splitting hairs with a national firm 111 1
- CGT on Self Build Plus Another Property 169 8
- DISCOUNTED RENT FREE PERIOD 111 1
- Sage training course 233 7
- Registering as a CIS Contractor 122 2
- HMRC online out of action? 142 3
- Hold over relief 247 2
- Benchmark scale rates for subsistance 122 1
- Overdue VAT returns 161 3
- Proposed Amendments to IAS 1 558
- Property exchange - 8-year legal delay following fall-out 407
- Accounting for Insurance Premium Financing 312
- IFA incorporation 284
- Can the receivers fees be allowed for tax? 270
- Mortgage interest claim on Buy to let hic up 268
- Moving into own BTL property - allowable costs 238
- SAGE Payroll Data for Import to MS Dynamics AX 226
- Will Ni be payable on the salary I receive abroad ? 196
- Life assurance gains anomoly?? 190