Previous years tax bill, this years expense?

[FrozenWaves]

Hi Ladies and Gents,

I am currently doing my year end accounts, and as the previous year was the first year I have made a profit, I had a tax bill.
I would like to know if the tax bill counts as a claimable expense for last year?

Any help is greatly appreciated as usual.

Cheers

[Rosco]

Hi FrozenWaves,

No its not a claimable expense.

If you are keen on doing your own financial statements and tax returns, I would suggest getting a review from a professional. There might be other simple items that you are claiming that you can't, or expenses that you don't know about. You could also be missing other opportunties or not producing the full information which might reduce what you can do in the future. For example a common one I see is not showing shareholders current account value.

Ross

[FrozenWaves]

Thanks Rosco,

I get an accountant friend to check my IR4 and IR3NR (I have been London based for the last 3 years) before I submit them to the IRD, he is away on holiday at present so thought I would ask the helpful folk here!

Could you please elaborate on showing the shareholders current account?

I am 100% shareholder of a limited company (used to be LAQC but didn't opt into the LTC).

Thanks again for your help.

[Rosco]

Shareholder current account shows the money you have put into the company, less what you have taken out. So the amount the Company owes you at 31/3/14.

Often when you have a personal house, we can look at borrowing in the Company to repay the shareholders current account, and thus increasing the amount of tax deductible debt. Therefore important to know what the debt is!

Ross

[FrozenWaves]

Thanks Rosco,

I don't currently have a record of my current account, although I do record funds introduced in my monthly cashbook.
Is it okay to backward-work out for the 5 years I have had the property, to come up with an upto date figure?

I don't own my own personal house, just the one Investment while I am based abroad. I do intend to purchase a PPOR when I return.
I have sunk a fair bit of cash in over 5 years, so would be nice if I could get this back through what you mention above.
Does the initial deposit i fronted for the purchase also count?

Thanks again

[Wayne]

Any of the money you put in minus any you took out counts.
LTCs help with this as they money has to be balanced at the end of the year
ie income minus expenses should balance the cash in the bank. The only differance is either borrowings or money you put in so becomes fairly obvious.

[FrozenWaves]

Thanks Wayne,
I think I have already missed the boat to convert my limited company to an LTC now haven't I?