Question 6b i
| Note | £ | £ | |
|---|---|---|---|
| Revenue | 264,900 | ||
| Operating expenses | |||
| Depreciation | 8,100 | ||
| Employee costs | 1 | 189,700 | |
| Lease of motor car | 2 | 1,200 | |
| Professional fees | 3 | 7,800 | |
| Other expenses | 4 | 202,800 | |
| (409600) | |||
| Operating loss | (144700) | ||
| Bank interest receivable | 0 | ||
| Loss before taxation | (144700) |
Previous results
Jump Ltd’s results for its two previous periods of trading are as follows:
| Year ended 31 May 2014 £ | Period ended 31 December 2014 £ | |
|---|---|---|
| Tax adjusted trading profit | 78,600 | 42,400 |
| Bank interest receivable | 1,200 | 0 |
Group companies
Jump Ltd owns 80% of the ordinary share capital of Hop Ltd and 60% of the ordinary share capital of Skip Ltd.
Hop Ltd commenced trading on 1 August 2014, and for the eight-month period ended 31 March 2015 has taxable total profits of £63,000.
Skip Ltd has been trading for several years and has taxable total profits of £56,000 for the year ended 31 March 2015.
Rates of corporation tax
Jump Ltd, Hop Ltd and Skip Ltd have always paid corporation tax at the small profits rate of 20%, and expect to continue to do so in respect of future profits.
Required:
(b) (i) State the main factor which will influence Jump Ltd’s choice of loss relief or group relief claims. (1 mark)