Claim company losses

H

hakouna

Registered User
Messages
145
Hi ,

In 2007 , while I was a PAYE , I set-up a small cpmpany ( sole trader ) for couple of months before I closed it down with some losses . I just filled-up form 11 for 2007 for income tax and submited it to revenue who came back to me with new assesment for income tax for 2007 .
The new assesment doesn't show any looses againist the business , only showing 0 income beside the name of my business + the normal income from PAYE job .
I though the loss would have been considered in some panels in the assesment or maybe to be written-off some taxes I have paid already , well , at least that's what a friend told me when he had his assesment done . Please correct me if I am wrong .

Cheers
 
I did , and , as far as I undrestood , the answer was : since my company didn't have income they couldn't write the loss againist the income , this answer didn't make sence to me , that's why I opt ot ask the expert on this site .. PLease clarify if you can
 
I'm not sure I understand, but don't let that worry you - its a permanent state for me.

If you registered a company, you can't off-set corporate losses against personal taxation - they are completely seperate.

Form 11 is self-assessment form for self-employed persons - why would expect your company tax or company trading losses to appear here?

Did you go through the process of dissolving the company?
 
The OP mentioned in their opening post that they traded as a sole trader. It appears that they are confusing the terms "company" and "sole trader". This may be why Revenue have not sorted the matter.

I presume that the OP has not taken professional advice on their tax position?
 
Thanks for your replies . I had Revenue - PAYE on the phone this morning , they informed me that losses can only be offset againist income from self assesment not from PAYE .
 
hakouna said:
Thanks for your replies . I had Revenue - PAYE on the phone this morning , they informed me that losses can only be offset againist income from self assesment not from PAYE .
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They are wrong. In general trading losses can be offset against PAYE income. That said there may be a good reason why this may not apply in your case. To determine this, you really need to speak to someone in the Revenue self-assesment office that issued your tax assessment and/or seek professional help.
 
Income received from a sole trade is called Case I/II income. You can only offset Case I/II losses against Case I/II profits. So you cannot offset your sole trader losses against your PAYE income. If you had continued with your sole trade you could have offset the losses against any future profits you make from the sole trade.

If you make a loss from a sole trade it will just appear as zero on the FACE of the Notice of Assessment that you receive from Revenue. Details of the loss will be shown on the full Form 11 that you submitted to Revenue.
 
sartay said:
Income received from a sole trade is called Case I/II income. You can only offset Case I/II losses against Case I/II profits. So you cannot offset your sole trader losses against your PAYE income.
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This is 100% wrong. See S.381-S.390 of TCA 1997.
Can you quote a source to support your view?
 
This is 100% wrong. See S.381-S.390 of TCA 1997.
Can you quote a source to support your view?
Click to expand...
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Fair enough, I didn't know that until now. Apologises for the misinformation! I'd been told that its not possible. Looks like hakouna should get back onto the Revenue then and quote them that section of the tax act! Or find out why it doesn't apply in his circumstances, as you said it may not.
 
Got back to revenue and I got confirmation that losses can be offset against PAYE income .
Thanks for all your input
 
This is terrible. If the OP was not part of this forum the revenue officer could have been the cause of him overpaying tax. What has happened is not unusual. You then hear the Chairman of the Revenue Commissioners on the radio/tv saying contact the revenue and they will help you out with your problems. You contact them and you get wrong information on the other end of the line. People should not be put into these positions until they are trained. Also who are accountable for these errors.
 
Unfortunately it's not unusual for Revenue to give out incomplete or even erroneous information. This is why it's important to double check everything and, if necessary, get professional advice before making decisions.
 
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