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April Question and Answer Corner
Newsletter issue - April 09.
Q. I formed my own IT contracting company in 1987, which made good profits. In 2006 that company bought the assets of several small record labels which were making a loss. In May 2008 I gave up IT contracting and my company has concentrated on music since then. The music business will probably make a loss in 2009. Can I set that loss back against the profits made by the combined music and IT businesses in 2008?
A. Yes you can. As both trades were active in 2008; the IT consultancy and the music business, there is no restriction on the amount of music business loss you carry back from 2009 to set against the profits made in 2008.
Q. In 2005 I retired from my architectural practice and sold my share of the business to the remaining partners. I invested the proceeds in Enterprise Investment Scheme shares (EIS), which I am about to sell, so I understand the gain from 2005 will now be taxed. Are there any reliefs I can claim to reduce that gain?
A. If the gain you made on selling your share in the architectural practice in 2005 would have qualified for entrepreneur's relief, which is possible if you were a partner for at least a year, you can claim entrepreneurs relief on that 2005 gain when becomes taxable in 2009. Entrepreneur's relief actually came into effect from 6 April 2008, but we pretend it was in place in 2005 for this test.
Q. A member of my staff has had a serious operation and will be away on sick leave for some weeks. If I send her flowers from the company will this be taxable as a benefit in kind?
A. HMRC ignore small gifts like flowers or chocolates to valued members of staff. They are classified as trivial benefits and are not taxable. If you were to send her a cash gift, or a gift voucher that would be taxable.
What our clients say about us...
"Paul has provided accountancy services to my company for 2 years now. I can recommend Paul very highly; his skills as an accountant are highly detailed and professional and he is always available to provide advice. One aspect of the way Paul works that I greatly appreciate is a preference to meet face to face when there is a detailed conversation to be had. I personally find this more productive and is a benefit of working with a small accountancy firm that you wouldn't get with the large faceless providers."
ALISTAIR FAIRWEATHER - PROGRAMME & PROJECT MANAGER, DELIVERING/RESCUING I.T. 7 BUSINESS CHANGE WITH BUDGETS UPTO £50M INC SUPPIER MANAGEMENT
"I couldn't ask for more from Paul as an Accountant. Paul has been accountant to Work Relief Charity Recruitment for just over a year now and is proving an invaluable asset. Accurate, knowledgeable, flexible with an emphasis on service delivery, I would recommend Paul's services to any organisation looking for an accounts professional."
Neil Price - Managing Director at Work Relief Charity Recruitment
"Paul was a referral from a family member when I started my business 2 years ago. As this was the first time I had ever run my own company I was totally clueless over the financial side of matters and was worried that I may have made mistakes in any of my accounting. I needn't have worried as after enaging Paul for a set monthly fee he was always there on the end of the phone for all sorts of questions I had and no matter how trivial they were Paul gave me all the information I required and more and did an excellent and painless job at the end of my first year! Couldn't ask for any better to be honest. Just two words - hire him!!!"
Lee Westrap MBCS - Director - Bulldog IT Services
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