The latest lockdown has again resulted in a pause in trading or a change in approach to trading for many businesses. Some of the potentially adverse tax consequences concern the impact on the use of losses, changing the nature of trade and whether the business can continue to be classified as a going concern for VAT purposes. HMRC is likely to be sympathetic to businesses that have had to adjust due to the pandemic. However, it is recommended that affected businesses review the availability of tax assets and other tax attributes that might be affected by a change in trading, and document their intentions and any actions regarding keeping the business going through a period of low activity and future trading.
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The latest lockdown has again resulted in a pause in trading or a change in approach to trading for many businesses. Some of the potentially adverse tax consequences concern the impact on the use of losses, changing the nature of trade and whether the business can continue to be classified as a going concern for VAT purposes. HMRC is likely to be sympathetic to businesses that have had to adjust due to the pandemic. However, it is recommended that affected businesses review the availability of tax assets and other tax attributes that might be affected by a change in trading, and document their intentions and any actions regarding keeping the business going through a period of low activity and future trading.
If you are not a subscriber, subscribe now to read this content.
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