High Clarity Accountants

TAX TIP OF THE WEEK – Are you planning a new business but are unsure of its viability. What’s the most tax-efficient way to proceed?

New ventures can often be risky a business and result in losses.

The good news is that there are some fall-back tax positions that can help you claw back some of that money.

For both trading as a limited company and sole trader, you can carry those losses forward against future profits.

However in the case of a sole trader, there are two other advantages:
Set off the losses against your other income in the year of the loss i.e. salary & dividends
Carry back the losses to set of other income from the previous 3 tax years

If you have been a high rate taxpayer then this can result in a nice chunk of money coming back to you from HMRC

Although the sole trader option seems the most beneficial it does depend on where the funds for the new venture will be injected from.

Hope this was helpful, for lots more tax tips and strategies get a copy of our 71 ways to save tax checklist https://bit.ly/2YQbhvr

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