Like all business we are dealing with our cashflow forecasting through deferments and funding etc, where applicable. We are also seeing tax advisors and accountants helping companies and individuals managing tax cashflows through extending accounting periods which will have impacts on Corporation Tax and Quarterly Instalment Payments.
Given everything that is going on no one will want to be paying too much tax and there are other ways to help with cashflow and tax cashflow too.
Alongside these deferments and other tax arrangements, historic capital allowances claims are also something that should be considered to assist. By historic, mostly we mean those that are for expenditure made before the last 2-year window and the real value of historic claims is very clear from our recent measured evidence:
In March 2020, we completed 20 claims for property owning clients resulting in:
- Analysing over £21m of expenditure.
- Identifying over £5m of allowances.
- Resulting in almost £1.5m in tax savings.
Half of those claims were for expenditure made between 2002 and 2017 confirming that capital allowances claims can continue to go overlooked for many years with businesses and individuals sitting on some real value all that time.
These may have been overlooked for some of the following reasons:
- Despite entitlement always being the starting point of any capital allowances claim, many still lean on local QS for valuation with little or no legislative consideration.
- Fixtures in old buildings are valueless.
- That extra CGT will result from claiming.
- Capital allowances claim are just a cashflow exercise that will result in clawback at disposal.
Addressing these points properly, and others, prevents claims and tax relief being missed and, simply put, capital allowances claims can aid the working capital position through:
Accelerating claims to reduce tax payments for those with imminent liabilities
- Companies with summer 2019 year ends
- Individuals due to make payments in July and then again in January
Amending a tax return to claim a cash repayment, if claims have been overlooked or previously considered not viable for various reasons like those above.
Whether accelerating claims or amending a tax return future tax bills may also be reduced.
Finally, when the current situation has ceased the pressure on the Government to collect taxes will be immense.
