20 questions on tax and Covid-19

The Covid-19 health crisis presents an unprecedented cocktail of challenges for businesses. The UK government has introduced tax relief and deferral measures alongside loan funding schemes and the coronavirus job retention scheme to help struggling businesses. Businesses are also dealing with a number of practical issues: looking to improve cashflow by raising new debt or equity and/or deferring or cancelling dividends; managing disruption to corporate tax residence compliance; and keeping on top of how to communicate with tax authorities. Awareness of both the tax opportunities and the potential pitfalls is key and should play a role in every business’s Covid-19 response plan. In the longer term, governments will need to strike a balance between incentivising activity and investment with the need to repair the public finances.