An allowable loss?

[Deleted User]

I'm just finishing off my self assessment for 09-10 and I had a question; I'm going to post it here in case others can answer before I phone HMRC and sound stupid.

At the end of the tax year I set up a LTD and stopped being self-employed. What I did was pay £1000 from my self-employment account to my LTD account to give the business funds to start with.

Do I treat the £1000 as a business expense on the SA (e.g. expenditure - a payment to my LTD) or not?

ncthomas1

No. The £1000 that you took from the STrader activities (regardless that it then went to a Ltd co) is DRAWINGS so no.
The Ltd Co is a legal entity in its own right. If you have put money in there (this £1000) that would then show as CAPITAL INTRODUCED by you on the Ltd Co accounts.
Does that help

[Deleted User]

ncthomas1 wrote: »

No. The £1000 that you took from the STrader activities (regardless that it then went to a Ltd co) is DRAWINGS so no.
The Ltd Co is a legal entity in its own right. If you have put money in there (this £1000) that would then show as CAPITAL INTRODUCED by you on the Ltd Co accounts.
Does that help

Perfect - that's what I thought. Sometimes though your brain gets a bit frazzled and I kept thinking along the lines of 'but have I had the benefit of those funds?' and couldn't work out whether it was a 'yes' (e.g. I draw those funds to help start a LTD) or 'no' (I could have drawn the money to spend as profits, but didn't).

I'll ignore it for the SA - thanks for helping me!

ncthomas1

you are most welcome.
Question - and I am being nosey now but anyway here goes
When you ceased Self employement and incorporated the Ltd co, is it the same business? i.e. do you do the same thing, have the same work etc etc?
Are you the only director & Shareholder?

This is leading somewhere I promise.

Just hoping you already know about the situation of selling the STrader "Goodwill" to the Ltd Co possibilties for tax minimisation purposes.

If you want me to expand on this just say, if not I will be quiet lol

Valueaddedaccountancy

ncthomas1 wrote: »

No. The £1000 that you took from the STrader activities (regardless that it then went to a Ltd co) is DRAWINGS so no.
The Ltd Co is a legal entity in its own right. If you have put money in there (this £1000) that would then show as CAPITAL INTRODUCED by you on the Ltd Co accounts.
Does that help

Two comments

• It isn't capital introduced, it is a director loan so will just in the loan account.
• Be careful with the good will idea - I will say no more