Can salary ever be not deductible for CT purposes?

[Lance]

No reason to stop salary if not actively trading. Otherwise all those 1000s of startups would not be able to pay salary to their staff !!

There are many reasons the OP would choose to pay salary; Was looking for client even if simply looking at job sights and LinkedIn periodically; Training and development, even if it was watching Python training videos on Youtube.

I'm not sure this counts. You cannot claim training as a business expense as it doesn't meet the wholly and exclusively test. So it's probably the ONLY activity that doesn't help the OP.

[NeverBackToPerm]

I am not following you, but you do sound confused.

There are two separate things here.

One is payment of a salary. You can always do that, it is entirely up to you as a director. You can set the level and the timing and file PAYE RTI accordingly.

Another is whether the salary is a legitimate business expense. That needs to meet the "wholly and exclusively" test, which is the test you probably cannot meet. If you could meet it, then you would carry back the loss and offset against profits in the earlier period. If you cannot, then you do not - it doesn't stop you paying the salary, but you won't get any tax relief (whether for the current period or an earlier period).

I didn't explain myself very well but I think this is exactly what my accountant is disagreeing with:

"You wouldn't be able to draw a salary, without including this as a business expense, as by its very nature an employee salary is an expense."

[jamesbrown]

I didn't explain myself very well but I think this is exactly what my accountant is disagreeing with:

"You wouldn't be able to draw a salary, without including this as a business expense, as by its very nature an employee salary is an expense."

Weird. A company can spend its money on anything its directors deem appropriate that is legal and doesn't breach their fiduciary duties. The only issue here is whether it is tax deductible, which rests on whether it meets the "wholly and exclusively" test (it appears not). I would ask your accountant for clarification about what, precisely, they mean, asking them to cite some evidence. It's safe to say that HMRC are highly unlikely to challenge something when there is no tax at stake, so I'm curious about who your accountant thinks is policing this.

[northernladuk]

Weird. A company can spend its money on anything its directors deem appropriate that is legal and doesn't breach their fiduciary duties. The only issue here is whether it is tax deductible, which rests on whether it meets the "wholly and exclusively" test (it appears not). I would ask your accountant for clarification about what, precisely, they mean, asking them to cite some evidence. It's safe to say that HMRC are highly unlikely to challenge something when there is no tax at stake, so I'm curious about who your accountant thinks is policing this.

Hasn't someone explained this before? I appear to be having a deja vu moment.

[NeverBackToPerm]

We explained this to him in his last long thread on this topic.

https://forums.contractoruk.com/acco...f-trading.html

Sounds like the accountant has had enough of him and said do it if you want to, it's your call.



And we've seen with other posts that just won't let a topic drop despite being given many words of wisdom, whatever we say doesn't matter a jot. The OP knows what he (wrongly) wants to do and nothing we tell them will make any difference.

It's just another of these 'Yes you are right, go ahead and do it you'll be fine' type threads.

Hasn't someone explained this before? I appear to be having a deja vu moment.

Well obviously nobody explained it to my accountant and I get a deja vu moment every time I read one of your troll posts.