HMRC issues reminder about loss relief extension
There is a temporary extension to the rules regarding the carry back of corporation tax trading losses due to the coronavirus pandemic. HMRC has just issued a reminder that some companies can speed up the claim for relief. What are the key points?
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Accounting for VAT if there is no cash payment
Your business has submitted repayment returns for the last two quarters and you are concerned that you might have underpaid output tax on some supplies where no money has changed hands. Are your concerns justified?
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Treatment of distributions under review
The government has launched a consultation on modernising the tax treatment of distributions and repayments of capital by companies. The proposals could affect the distinction between dividends taxed as income and capital payments subject to CGT. What changes are being considered?
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Tax relief on equipment you haven’t paid for (yet)
The timing of tax relief for purchases of equipment isn’t straightforward when payments are delayed or goods are purchased through hire purchase (HP) agreements. How can you use these rules to your advantage and get tax relief before you’ve paid the final invoice?
Corporation tax trading losses can generally be offset against other profits of the same accounting period, carried forward to offset future profits, or carried back to be offset in the previous accounting period. Due to the coronavirus pandemic, the carry back period is extended to three years for losses realised in accounting periods ending between 1 April 2020 and 31 March 2022. In general, this will be claimed via the corporation tax return, but HMRC has just issued a reminder that there is an alternative method available for smaller losses.
If the loss doesn’t exceed £200,000, the company can make the claim via an online form. This can be done as soon as the loss can be accurately established after the end of the accounting period. This means that where there is a delay in filing the corporation tax return, the relief can be claimed immediately. The form is available via the Government Gateway, and can be accessed here (log in details required). Evidence of the loss, e.g. management accounts will need to be provided.
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