Re:
If you set up a company (to run an event, especially) it's usually a good idea to ensure you make a loss in the first few years; it's a very tax-efficient way to plan, particularly if you have a 5-year overhead contract, for example.
Any losses in the first few years can be amortised over the next few in your accounts, basically you deduct what you lost from what you make - and you only pay any tax owed on the net profit left over.
This is easy to achieve if you pay contracts for services, portaloos, security, ground rental etc for all 5 years in advance.
Otherwise if you make a small profit in years 1-3, you will pay full-rate tax on the potentially larger profits in years 4-5; your year 4-5 net profits will therefore likely be smaller; and so your event looks like it is losing popularity and profitability.
If however you ensure losses in the first few years, it's broadly expected [of course, you may not be well-organised and thus you are making genuine losses; not so great..] but to turn a 3-year loss into a profit then makes the event, and organisers look much more successful, and also ensures that money made in terms of losses has the potential to have been used fully/properly towards the event itself up-front, rather than being taken by the taxman.
