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Question 5b i
Cresco Ltd:
– Is a UK resident trading company.
– Commenced trading on 1 April 2012.
– Is registered for the purposes of value added tax (VAT).
– Has made significant trading losses in recent months such that the company will need to cease trading on 31 October 2016.
Cresco Ltd – trading losses:
– Recent and anticipated results are as follows:
| Year ended 31 March 2013 | Year ended 31 March 2014 | Year ended 31 March 2015 | Year ended 31 March 2016 | Period ending 31 October 2016 | |
|---|---|---|---|---|---|
| £ | £ | £ | £ | £ | |
| Trading (loss)/profit | (5,000) | 21,000 | 8,000 | (24,000) | (40,000) |
| Bank interest receivable | 1,000 | 3,000 | 3,000 | nil | nil |
– Cresco Ltd always claims relief for trading losses as early as possible.
Required:
(i) Set out, together with supporting explanations, how Cresco Ltd will claim relief for the trading losses incurred and identify the amount of trading losses which will remain unrelieved after all available loss reliefs have been claimed. (8 marks)