Tax on small business, folded in 1st year

Duchard_2

Hello, I wondered if anyone could offer some advise on my current situation. My wife and I registered a small magazine business last year and nearly 9 months down the line we are looking at folding the company as it isn't making any money and my wife now is picking up more hours with her main employer so we don't have the time to continue anymore. My question is whether there are tax reliefs available for failing 1st time companies? Total income of the business since we started is about £8K but all of this (and more) has gone into the business itself (mainly printing and postal costs). We have used about £1.5K of our own money to try and get it lifted. I know you can offset some of the tax with company expenditure and we have been running the company from home with IT equipment, etc..
If we folded the company now would we still be liable for Tax? Our business account holds all the information of our transactions incoming & outgoing so it would be easy to show evidence of its losses. Any help appreciated.

Pennywise

What type of business is it? Sole trader, partnership or limited company?

It will be taxed on it's sales less allowable expenditure which equals taxable profit. To arrive at this figure, you need to prepare a profit and loss account and then apply tax adjustments for things like equipment purchases, private proportion add backs (st and ps), etc. Then you get a figure for taxable profit or taxable loss.

That figure, together with the type of business, then enables us to tell you what to do with the profit/loss and how it affects your tax.

Duchard_2

Thanks Pennywise.

We set the company up as private limited with share capital. This is what our business manager recommended at the time to us. The company actually has no shares. I am trying to understand what the future holds as at present we would not be able afford to pay tax on a business which we have lost money on. There must be some government scheme which waivers people like us who have tried but not succeeded rather than driving us into the ground demanding money which we haven't got because we used it trying to get the business moving in its crucial first year! sorry - rant over..

Pennywise

Corporation tax is on profit - if it's made no profits (according to the tax laws), then no corporation tax due.