How long can I run a business loss?

redunited

4 years ago I started a business, I did everything I believed was correct, registered for VAT, got my company name etc.

I was unemployed at the time and started off on a BTWEA scheme.

Since then I have now left the scheme and been operating my business more as a part-time affair as I have become the home carer in our family home.

We don't rely on the business for our income, I have been running it more as a keeping me sane/hobby kind of business. I enjoy what I do, and have a few customers but overall I'm making a loss when you take account of all the running costs involved.

As I work from home a lot of the running costs are what I would be paying anyhow, but as I'm allowed to claim part of the running costs like heat and electric for Tax and Vat purposes the end of year accounts show me as a loss.

After 4 years I have gained far more back from VAT than I have paid, nothing fishy, everything above board. I'm just not trading that much.

My question is, can I continue to do this, or is there a rule on how long you can run a business in the red for?

I was thinking of deregistering the VAT as I'm claiming back more than I pay, but I notice that this is almost impossible to do without paying back all the claims I made in the past.

Can I continue to run my business in the hope it picks up, or is it best or should I close it down?

Thanks for any advice.

jimmii

You can run a business at a loss for as long as you have money! If you couldn't run a business at a loss we'd have no Facebook or amazon or many other household names they lose millions for years!

In terms of what you should do only you can really answer that without knowing a lot about you and your business it's hard to say what will happen next. It all comes down to exactly what you're doing, how hard you're willing to work and whether you really want it or not. You seem happy to just run it as a hobby and not really make much money from it which doesn't really make it seem likely there will be much change to the business unless there is more of a change on you first.

dbran

Hi there

You can run a loss for as long as you have the money to. But in terms of how long you can continue to claim VAT refunds. The revenue will eventually query the refund on the basis that the credits may not be business related but actually personal. This is especially the case when the level of activity of the business is low and it is making a loss.

I would probably deregister for VAT as it is a bit of paperwork that you do not need.

dbran

CeilingFly

It's impossible to claim back more than you paid.

Maybe you have claimed back more vat than you have charged clients, but you have paid vat to suppliers and once its for a bona-fide business expense there should be no problem.

If revenue mark you they will check your accounts and if that matches your vat returns there won't be an issue.

You simply need to see if there's a chance of pickup in the business and maybe see if there are changes you could make to give it a chance to turn a profit.

Maybe a little chat with an accountant to give an overview?

Ken.

I know f all about owning a business but an idea came to mind when I seen your thread. Could you sell the business to another company that does what you do. You might even get a part time job out of them.

Avatar MIA

When you say you've claimed far more, that's a bit subjective. How much roughly? Hundreds, thousands, ten's of thousands?

Boardnashea

Requirement to register for VAT depends on the amount of business you are doing. The threshold is something like €40,000 (check Revenue.ie). If you are under this level you do not need to charge VAT. If you deregister then you can't claim back VAT paid either.

Do you have an accountant/adviser? Ask them for advise.

A lot of companies are purposely run as loss making, this is not something you need to worry about at all, so long as you do all your paperwork and filing correctly.

euser1984

i haven't read all the replies here - my apologies but the global financial system is a debt based system.

get as much money off the banks as you can if you have a ltd business. but fork out your business structure to protect it the whole thing falling apart.