If you’ve had a bad year due to the virus then it might be worth getting your accounts to the taxman nice and early this year so that any loss relief claim is at the front of the queue.
A company making a loss this year can make a claim to carry the loss back to the previous year and get a refund for some or all of the tax paid last year.
It is also important to make sure that you include all costs that relate to the current year to maximise the losses available, or reduce the amount of tax due.
Let’s take a look at an example. If you decided to make a redundancy before your year-end but didn’t actually execute it until afterwards then the redundancy costs can be relieved in the current year.
Another example would be a bad debt – if one of your customers couldn’t pay then you could make a specific bad debt provision and claim the tax back a whole year earlier.
If you’ve been developing a new service or product, or new system in your business during the downtime you might qualify for the R & D tax credit. The great thing about R & D credits are that if you don’t have any tax to pay this year you can get the tax back on the expenditure as a payment from HMRC.
Your accountant should be taking to you about these things if your year end is coming up, if they haven’t, please contact me here and I’ll walk you through what you may be missing.