Hi is there a legal way to move profit from one really good year to the next (knowing it will be really bad) year. So as to balance out taxes or to avoid showing a big loss in year 2. Obvious to me is a loan or to buy something as a asset and then sell it later. Really dont know.
Does moving your year end date help maybe?
Thanks
There are specific rules on losses to be offset against future and past profits depending on nature of losses itself, Assets might attract different tax allowances but gain would be taxable. extending year end or shrinking it can be used as tax planning but not tax avoidance
HI thanks. The idea is not really for tax avoidance unless there is no profit at all. If there is profit it would spread tax over 2 years not one but would still add up to the same amount… I guess thats what you mean by tax planning? Do you have a gov ref to the rules on offsetting against future and past profits. The losses I was mentioning were due to lack of sales due to the loss of a main customer. Just trying to find a way to stay afloat. Could be called tax avoidance or extreme planning. No tax would come from a liquidated company.
Hope that makes sense.
Thanks. One last one if I may. Why do people move their company account ref end date. Why extend it to 18mths? I know you can only do it once in 5 years so I guess there’s advantages to a business. Cheers
You typically have 9 months from the end of the accounting period within which you must submit your accounts. I think extending the accounting reference date pushes your year end back and therefore extends the time you have to file.
Hi thanks, are you still filing for the 12 months and then also the 9 months separately or for the whole 21 months? Cheers
Accounts will be for the whole extended period but CT cannot be over 12 months therefore multiple CT return
HI got it! thanks to all. So summing up moving the year end is just buying time. Thanks