Corporation tax loss

Dear HRMC, I would like to file the corporation tax by myself for my micro limited company, which mainly held property for rental income. In the first year, the company incur losses but when I use the HRMC online form to file the tax loss. It is not allowed because the company is net liability. Please help and advise. Thanks!

Hi
HMRC’s free filing service was introduced for use by unrepresented companies with straightforward tax affairs. 
Eligibility criteria was set to determine who could and could not use the service and this is described here:
Check if you can use the HMRC Corporation Tax online filing service
This explains you can report Income from Property up to £5,200 but the expenses cannot be greater than income.
If they are, which is your situation, you don’t meet the criteria for using our free filing service and you’ll need to use Commercial Software to file your company tax return.  
List of commercial software suppliers for Corporation Tax
Thankyou.
 

Thank you for your information. I have subscribed software for filing of corporation tax. But in the software, I have the following question: 1. On the main page, it has turnover from trade. Per my understanding, as the principal activity of the Company is just property income and gain from sales of property only. Should the property income inputted in turnover from trade (145)? Or I should input all the income and revenue into property page, property income (190)? Thanks! 2. If in question 1, the answer should be all the property income inputted into property income page of corporation tax (190). It is so strange that any losses will not be shown on the main page, trading losses. The trading losses are zero on the main page. It cannot be tied the loss amount in CT600 (zero for trading losses) to Micro account with loss of about 3000 pounds. 3. In the micro account, as mentioned before that property income and gain is core business income of the Company, should the rental income inputted into sales rather than other income. Per consulting with the software company, they told me that I should input property income into property income page (190) in CT600 and input the rental income into other income in micro account. But I am not understanding why I should input all the property income into sales or turnover from trade (main business turnover line). Thanks!

Hi SamSam,

The property business is not a trade if the property was acquired as an investment asset.  
Rental income should be shown as property income.  
As the property business is not a trade, trading losses are not appropriate.  
You can find out all about taxation of property income in HMRC Property Income Manual.

Thank you.

 

Dear HRMC, Thanks. But my company main business is buy and sell properties and rental income to wait for sales after a period. I have noted that if the property income and expenses inputted into property income (190) page. The loss will not be shown on the main page of the tax filing. It cannot use the rental income loss to set against the gain from the trade such as trading gain from selling the property? or anything I need to file to claim the property loss to set against the future gain? In addition, for the account filing, the rental income should be treated as turnover or other income? Thanks a lot.

Hi,

Losses as such are not reported on the return at 190 as negative figures cannot be input.

You can see information regarding the property losses being able to be set against any capital gains here:

PIM4235 - Losses for CT: overview

The CT600 guide which advises what entries need to be put in what boxes can be found here:

The Company Tax Return guide

Thank you.