Newly Incorporated - Expense Query :)

Cove.Throne

Hi Guys,

My business was incorporated last month and we're just trying to get a better grasp of the Accounting Tax/Expenses side of things.

I have been reading that newly formed LTD companies, can avail of a 3 year exemption from Corporation Tax. If this is so, against what can we claim it back as we are exempt from corporation tax? Can we claim it against our Income Tax for any money we take out of the Business?

Thanks and any help/input would be much appreciated.

jimmii

I think you had to be incorporated by the end of last year. Ring the renevue but it looks like you may have missed the boat I can't find anything that refers to businesses set up this year in relation to it.

See the bottom part on this link:

http://www.byrnemccall.ie/byrnemccall/main/TaxExemptionforStartUpCompanies.htm

Cove.Throne

jimmii wrote: »

I think you had to be incorporated by the end of last year. Ring the renevue but it looks like you may have missed the boat I can't find anything that refers to businesses set up this year in relation to it.


Thanks for your reply!.

We were incorporated in late December, so I think we should be okay in this regard.

Thanks.

Cove.Throne

Thanks for your reply!.

We were incorporated in late December, so I think we should be okay in this regard.

Thanks.

jimmii

Cove.Throne wrote: »

Thanks for your reply!.

We were incorporated in late December, so I think we should be okay in this regard.

Thanks.

Thats ok so best not say last month to Revenue they might assume you mean January!

Cove.Throne

jimmii wrote: »

Thats ok so best not say last month to Revenue they might assume you mean January!

Yes indeed! Apologies an oversight on my part while posting.

So if we take it on the grounds that we will be exempt from corporation tax, can we claim our business expenses against the income tax we will pay?

Thanks again!.

jimmii

Cove.Throne wrote: »

Yes indeed! Apologies an oversight on my part while posting.

So if we take it on the grounds that we will be exempt from corporation tax, can we claim our business expenses against the income tax we will pay?

Thanks again!.

It just covers corporation tax I don't think you can offset anything against income tax. Its probably worth talking to an accountant even if you plan on doing the books yourself it starts up a relationship ahead of end of year filings and they'll also be able to advise you on the scheme.

Cove.Throne

jimmii wrote: »

It just covers corporation tax I don't think you can offset anything against income tax. Its probably worth talking to an accountant even if you plan on doing the books yourself it starts up a relationship ahead of end of year filings and they'll also be able to advise you on the scheme.

Ah I see. We met with our accountant last week and he had spoken quite a bit about expenses and particularly tracking them. It was only later in the day when we as a Team sat down to discuss it further, that we realised that we were not entirely sure how this would work in practice i.e what would we be claiming our expenses against.

It was then through some research, that we noted we could likely be exempt from corporation tax - so this left us in further uncertainty in relation to charging expenses.

Seems a bit odd that he would speak at length about reclaiming expense even though we seem to fit the bill for an exemption from corporation tax. These weren't VAT related either.

Thanks for your input

jimmii

Does seem strange as they must have known. You would hope so anyway! What sort of expenses do you mean? Business expenses are deductable against your income whatever is left over is your profit and yay no tax on that for three years!

CIARAN_BOYLE

What type of business is it? Is there a possibility that you would not qualify for the exemption. Are you VAT registered, no exemption applies in relation to this tax head?

Accounts still need to be prepared, perhaps your accountant wished them to be accurate.

Tax relief is limited by empoyer prsi paid, do you have any employees?

Maybe he wants you to generate a positive directors loan so that the company can pay you tax free in the future.