Company Tax Loss on Tax Return

[Nishi018]

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Hi,

I’m helping a friend who has started a small pty ltd business do some book-keeping. Last year expenses were more than income, thus the company made a loss. It was my understanding that this loss from a tax perspective could be carried forward to future years and offset any tax payable in future years. I had a look at the tax return that their accountant prepared and they did not fill in a tax loss carried forward to later income years in 13U. Is this correct or should the accountant have entered the loss here on the company tax return?

[Lisa Crocker]

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Hi Nishi018,

Welcome to the forums, great to have you here

I’m not an expert on tax matters, but hopefully someone else here will be able to step in and offer some advice.

Cheers,
Lisa

[Nishi018]

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Lisa Crocker, post: 211468 wrote:

Hi Nishi018,

Welcome to the forums, great to have you here

I’m not an expert on tax matters, but hopefully someone else here will be able to step in and offer some advice.

Cheers,
Lisa

Thanks Lisa

[NickKaro]

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Nishi018, post: 211466 wrote:

Hi,

I’m helping a friend who has started a small pty ltd business do some book-keeping. Last year expenses were more than income, thus the company made a loss. It was my understanding that this loss from a tax perspective could be carried forward to future years and offset any tax payable in future years. I had a look at the tax return that their accountant prepared and they did not fill in a tax loss carried forward to later income years in 13U. Is this correct or should the accountant have entered the loss here on the company tax return?

It should’ve been entered in losses carried forward.

[Nishi018]

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NickKaro, post: 211481 wrote:

It should’ve been entered in losses carried forward.

Thanks Nick. I’m still a little confused as things I’ve read on the ATO website seem to indicate it should be (maybe I’m misreading it). Can I indulge you to elaborate?

[ThexArm]

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Only tax losses can be carried forward. Not all business losses.

You may be aware that not all expenditure is classified as deductible as per ATO. So, the profit/loss number you see on Tax return rarely matches with your normal books.

I am not a tax accountant but you need to consult a registered tax agent for advise.

From your post I can see you are trying to help out a business doing bookkeeping work. Bookkeeping is also regulated these days, so please mindful that you don’t provide advise/work in regulated matters.

Sent from my iPhone using Tapatalk

[James Millar]

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Nishi018, post: 211501 wrote:

Thanks Nick. I’m still a little confused as things I’ve read on the ATO website seem to indicate it should be (maybe I’m misreading it). Can I indulge you to elaborate?

I think Nick saying that ..if there was a tax loss then yes it should have be filled out in the tax return at appropriate label. There is a chance the accountant has missed it. Doesn’t surprise me. We often see labels incomplete (franking balances, CF losses are two big ones).

Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900

[NickKaro]

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JamesMillar, post: 211577 wrote:

I think Nick saying that ..if there was a tax loss then yes it should have be filled out in the tax return at appropriate label. There is a chance the accountant has missed it. Doesn’t surprise me. We often see labels incomplete (franking balances, CF losses are two big ones).

Thanks James – that’s exactly what I meant.

I see the issue frequently, problem is that many tax return preparation systems do not show a validation error for CF losses thereby resulting in many people missing it.

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