Reply to post: Re: The grew the business...

Facebook pays, er, nope, gets £11m credit from UK taxman HMRC...


Re: The grew the business...

"Welcome to the new generation of tax accounting where "investment" = "loss" for tax purposes."

Thats not even close to being new. If you invest in something you pay money out, its an expense to your business and therefore reduces your profit, as tax is paid on profits it also reduces your tax liability.

If the investment pays off you make more profit in the future and pay tax on that, if it doesn't you have lost your investment your profit doesn't change.

Not exactly the same, but a real world example:

Im a contractor, I work out my corporation tax monthly, So (FOR EXAMPLE) say I get £10k a month coming into the business and have 2k of expenses (For example a weeks training), I pay out £1600 in corporation tax that month.

Now imagine the next month something goes wrong and my invoices dont get paid, I go on another course so have same £2k in expenses... so my CT for that month works out at £-400, thats not my company gaining £400.

If that pattern goes on for more than four months HMRC end up owing me money.... Ill never see that money... but my spreadsheet will show it none the less...

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