My fellow Sagars team members and I have worked together throughout this pandemic to cover off the various COVID-19 support measures that are in place to help businesses.
However, something else that may be of additional assistance to businesses is not a specific COVID-19 scheme but a basic relief within the tax legislation.
It is usually possible to carry back your trading losses to the previous year and you don’t necessarily have to wait until the loss year is finalised to do so. If for example your March 2020 year showed profits, but it has been pretty poor subsequently, you may be able to mitigate the payment of your March 2020 corporation tax bill by demonstrating to HMRC that you’ve made losses. Management accounts may well be sufficient evidence in most cases.
In our experience, HMRC are being quite reasonable when dealing with these claims. There are obviously a number of options available to you if there’s a tax bill that you are struggling to pay and, depending on whether you operate as a company, partnership or sole trader, these might include negotiating Time to Pay or using the income tax deferral we have previously mentioned, but it’s good to know that you may not even need these if you can simply carry a later loss back to cover the tax. Depending on your year-end, it may even be possible to seek a repayment of tax that has already been paid if you have incurred losses.
I am always happy to talk through your options with you. Just contact your usual Sagars team member, email me or get in touch by phone 0113 297 6825.