Corporation Tax

lthompson87

Could somebody help me with the following please?

I am the director of a limited company, I set the company up as a special purpose vehicle to buy and manage BTL properties.

I gave the business a directors loan to start up. My question relates specifically to corporation tax. Will the business be liable to pay its corporation tax before it repays the loan.

Also is corporation tax charges on the companies turnover or profit? If so, could claiming expenses against the business lower it’s profit and therefore it’s tax ?

anselld

Corporation tax is on profit. It has nothing to do with the loan which is about cash. Corporation tax is due nine months after year end regardless of loan repayments.

Expenses should obviously be deducted from income to arrive at profit.

Please get an accountant because it will be expensive if you do not file the relevant submissions to HMRC and Companies House correctly.

BoGoF

lthompson87 wrote: »

Could somebody help me with the following please?

I am the director of a limited company, I set the company up as a special purpose vehicle to buy and manage BTL properties.

I gave the business a directors loan to start up. My question relates specifically to corporation tax. Will the business be liable to pay its corporation tax before it repays the loan.

Also is corporation tax charges on the companies turnover or profit? If so, could claiming expenses against the business lower it’s profit and therefore it’s tax ?

Wow.......just wow.

Not a clue have you.

csgohan4

OP you need to pay for tailored accountant advice rather a bunch of strangers.

Get it wrong and the HMRC will come knocking, not worth the risk.

00ec25

lthompson87 wrote: »

Could somebody help me with the following please?

I am the director of a limited company, I set the company up as a special purpose vehicle to buy and manage BTL properties.

I gave the business a directors loan to start up. My question relates specifically to corporation tax. Will the business be liable to pay its corporation tax before it repays the loan. of course it will. Tax is taken from the profits, that has nothing to do with what loans are still needing to be repaid

Also is corporation tax charges on the companies turnover or profit? If so, could claiming expenses against the business lower it’s profit and therefore it’s tax ? oh dear

those are about the most basic of queries you could possibly have when running a company.

Do you really not have an accountant? You need one (desperately)

prowla

In broad outline...

The company deducts operating costs (& VAT, if registered) from its income.

Operating costs include things like company purchases, expenses, training, insurance, and salaries, but not loans & dividends.

What's left is the company's profit.

The profit is subject to Corporation Tax, which must be paid by the due date.

The remainder can be taken as dividends (which must be declared in your Self Assessment and are subject to personal tax).

You can issue loans against the profits, but you cannot exceed that amount.

There are also strict dates for the submission of accounts, annual statement, P&L (profit & loss), PAYE, VAT, and so-on. There are fines if you fail to meet the dates.

There is information out there to cover all of the activities, but it is non-trivial and (deliberately) confusing; it is also time-consuming.

As has been suggested, it might be best to engage an accountant to help with this if it seems complicated.

Hope that helps...