Hi everyone. Just wondering if someone could give me a little help, please. I am stuck on a question I've come across in my Business Tax studies, and I'm unsure at which point to calculate the Corporation Tax. The info is as follows:
Profit and loss account
2015 | 2014 | ||
---|---|---|---|
£ | £ | ||
Retained profit ( loss ) at 01 November 2014 | (30,665) | 2,409 | |
Profit ( loss ) for the year | 70,410 | (33,074) | |
Dividends paid | 16,777 | - | |
Retained profit ( loss ) at 31 October 2015 | 22,968 | (30,665) |
At which point do I calculate the CT for year ending 31 Oct 15? Do I deduct the loss from the previous year and then calculate the CT due i.e. 70,410 - 30,665? Or is it calculated on the full £70,410? If the latter, where does the loss get incorporated as relief?
Many thanks for your help.
Lisa
Replies (3)
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£70,410
You should start the computation with the profit for the year of £70,410.
As far as the losses are concerned, it depends what happened to the losses in the computation for the previous year. If they were not used in some other way (set against other income or carried back to earlier years) they would have to have been carried forward. If so, the losses can be set against this year's profits.