raju4u wrote:hellonewhere wrote:@thanks cs95tdg
Just to be clear as due to the timing difference, the 2k difference was included in the 36k?
Sorry for all the questions but as cs95tdg mentioned, recently many applicants have been having issues, therefore, just want to be certain re the figures.
No you don't have to amend anything and there's no tax on loss.
You made a genuine loss and therefore you didn't have to pay any tax.
I assume that you have a company as you mentioned dividend - is that correct?
In the year that you incurred a loss, you had no dividend, therefore, no tax to pay, therefore nothing to amend, and I strongly advice against making a "fictional" figure just to pay tax.
I assume you filed a zero tax return ( can one do that? ) or informed HMRC that you had no income to declare therefore didn't file one ( I have done that )?. I also assume that you had an account filed at companies house and hmrc. Accounts and tax returns are two separate things. Sorry for all the questions.
What you did was a legal way of doing things. And HMRC paid you back because you can carry back and forward losses;
Here it explains more;
https://www.gov.uk/corporation-tax-calc ... ing-a-loss
I wouldn't worry in your place and also I strongly advice to go through the link that cs95tdg posted.
This is how it happened, Initial visa applied on £35k requirement, profit of the business dividend + salary £36k approx, i got the visa and paid the tax on £35k in time. Then came the next year had a loss and i filed the tax returns as usual, my expenses were greater than the profits so it was not zero tax return it was just i had to bear more expenses than i earned. So hmrc gave me £2k back because of the loss. Yes i read all the links in detail they mention the standard requirements i am not decieving anyone i am just caught up in a situation which is little bit confusing. And it is a limited company and a retail shop business.
If the loss was carried back to the previous year it means the income got slashed from previous year but income is counted as of 12 months not 24 months, that is confusion for me.
now one thing i want to mention that when i login to my account on hmrc then my 2010 to 2011 income comes up as £35k and tax paid on their site appears accordingly. and the next year it shows that business gone in loss. So i don't know what to do. I will not have appeal right in case im refused for this reason. well just confused to be honest. thanks for your time and reply.
Don't be confused and don't panic; and no you are not deceiving anyone!
These are minor things which can be worked out so lets try and figure it out.
1) ah so the 37k was made up of 2k salary and 35k dividend, and hence you paid tax on the 35k. That's fine.
2) When you are saying "income", you are actually referring to a dividend right?
2) If you are a director and shareholder of a limited company then your income and expenses don't go on your tax return; these are worked out on the accounts to be able to figure out how much profit/loss you made and how much dividend you can or cannot take out. So your business made a loss, and the loss got carried back as you had a profit previously. And yes you can draw out a salary even if your business is making a loss, but not a dividend - that would be terrible for business!
And it's
accounting period and not "months" as we generally talk in day to day etc.
It's generally for 12 months ( unless you had a longer accounting period of 18 months ), and the loss was carried back to your previous profit - not income ( don't forget you have a company! ). Maybe the confusion is coming from you calculating your losses to the intial return ( yes that would be 24 months ), but the losses are offset against your previous accounting period.
I will give you an example;
For example, if your company has a loss of £8,000 in the accounting period 1 January 2010 to 31 December 2010 and profits of £20,000 in the preceding 12 months, you can carry back the £8,000 loss to be set off against the profits for the previous accounting year, reducing them from £20,000 to £12,000.
But, if an accounting period straddles that 12-month period, the profit for that period is apportioned and the loss can only be offset against that portion of the profit falling within the 12-month period.
For example, if your company has a loss of £8,000 in the accounting period 1 January 2010 to 31 December 2010 and it has recently changed its accounting date, so that the accounting periods and profits of the preceding periods were 1 July 2009 to 31 December 2009 £2,000 and 1 July 2008 to 31 July 2009 £10,000, you can carry back £2,000 of the loss to cover the whole of the profit in the period ended 31 December 2009. The balance of the loss of £6,000 can’t be entirely carried back as only 6 months of the profits of £10,000 fall into the preceding 12 months of the loss making period. Therefore only a loss of £5,000 (6/12 x £10,000) can be used and the balance of £1,000 is available to be carried forward to the year ended 31 December 2011.
If this is too complicated, let me know what your accounting period was and when you made the losses and we can figure it out.
Can I ask that you are up to date with all your filing at Companies House and HMRC?
There's nothing to be worried, it all seems fine to me.
