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Carrying forward trade losses

Carrying forward trade losses

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If a company has trade losses which have arisen from a restaurant business, and closes down the restaurant and buys another one in the same company, can the trade losses be utilised against the profits of the second restaurant on the basis that it is still the same trade?

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By pawncob
07th May 2013 17:32

It all depends

If you ran several restaurants concurrently, it wouldn't be a problem, would it?

Does Macdonalds start a new trade with every new venue?

http://www.hmrc.gov.uk/manuals/ctmanual/ctm04150.htm 

The only question is, was there a  cessation?

 

 

 

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By Jigs
07th May 2013 19:25

Yes the restaurant closed then a month or two later the new restaurant was purchased, so I am guessing that this i treated as a cessatio of trade and therefore the losses cannot be carried forward??

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By BKD
08th May 2013 08:01

I wouldn't waste time corresponding with HMRC

Based on the limited information available, I would carry the losses forward, but making suitable disclosure on the tax computation.

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By carnmores
08th May 2013 08:10

I agree with BKD

whats to lose , if you disclose and claim and the losses are  dissallowed later what have you lost . HMRC can always change their mind anyway. Use the white box equivalent and attach a pdf.

BTW what do the articles of the company say is the trade of the company and what are theSICc codes @ CH

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By Steve Kesby
08th May 2013 10:32

I too am concurent with BKD

If in difficulty, it's always worth quoting BIM70535 at HMRC. Closing a loss-making site and seeking out a more profitable location seems an eminently sensible thing to do. It certainly doesn't mean that the restaurateur trade has ceased.

@pawncob I think you'll find that McDonalds (like Starbucks) operates a franchise model.

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By pawncob
09th May 2013 10:23

One is never enough...........

@Steve. You can have more than one franchise.........

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