we have a small ltd company client that made a small loss this year of 4845 . after adding back depreciation etc the adjusted loss becomes 2788.this obviously does not cause any problems when calculating the corp tax or refund due. they made a profit of 4000 last year.
this year they now rent out the flat above the salon and receive 7800.
would i A) complete the ct600 showing a profit of 5012 (7800-2788) and calculate the tax due or B) would the loss of 2788 be increased by 7800, to make a trading and professional loss of 10588. then add back the rental income to be releived against current profit (the rent) then to make a trade loss of 2788 that could be carried back and set against the previous year's profit of 4000 . thus there would be a ct refund due on 2788 at last years rate (21%).
any help would be appreciated.