Costs that businesses incur to clean up after the recent storms, that affected the north and east coasts in particular, need to meet the usual qualifying criteria that they are incurred “wholly and exclusively” for business purposes in order to be a legitimate write-off for tax purposes.
If the costs are covered by insurance, no tax relief would be due. If costs are discovered to be partially covered by insurance, then only the unrecovered costs would be allowable for tax purposes.
If you have extended your business cover to include loss of profits, you can hopefully recover not only the direct costs of cleaning up but also any profits lost due to the disruption.
There are also a number of tax based risks that are not insured, but directly due to the consequences of being unable to trade after a bad weather incident. For example:
- Facing fines due to late filing of income tax, corporation tax or VAT returns;
- Loss of business accounting records;
- Adverse cash flow, unable to meet tax payments on-time;
HMRC have recently opened a new help line to assist with these consequential tax effects. They would help to:
The helpline is 0800 904 7900. The line is open seven days a week: Monday to Friday 8am to 8pm, and weekends 8am to 4pm. The line will not be open bank holidays.
- The increasing pull of fiscal drag - November 29, 2022
- Millions receive first energy bill payment - November 24, 2022
- Minimum wage rise is good news for lowest paid workers - November 22, 2022
- Autumn Statement 2022 - November 18, 2022
- Payment plans help rising number of Self Assessment customers - November 16, 2022
- HMRC brings in profit-assessment change for sole traders and partnerships - November 15, 2022
- Plan to future-proof UK economy unveiled at expo - November 11, 2022
- Do not let COVID-19 payments slip off the radar - November 8, 2022