Your business is making a loss if its expenses are greater than its income. Businesses that are making a loss do not have to pay income tax.
A loss can often be used to reduce your taxable income in the future.
If your company is making a loss it may be able to:
- carry the loss forward to the next tax year to offset its income
- transfer the loss to another company.
If your company is a look-through company any losses will be passed on to its shareholders.