Shirley Mcintosh

Written by: Shirley McIntosh

Shirley McIntosh

Partner

Another source of funds for business?

One of the many provisions enacted by the Government to provide support to business during the pandemic was an automatic extension to some Companies House filing deadlines. This meant that companies with filing deadlines between 27 June 2020 and 5 April 2021 received an extra three months to file their annual accounts. Many companies have taken advantage of this to better focus on keeping their businesses alive.

That extension has now come to an end and all companies with accounts filing deadlines after 5 April 2021 will need to ensure they meet the usual deadline. For most privately owned companies this is nine months after the year end. While it is still possible to request a three-month extension in some cases, it isn’t always the best idea to take as long as possible to prepare your accounts.

For businesses that have been closed for some time, progress towards an opening up of our economy is welcome, but that may also bring additional expenditure to ensure premises are ‘Covid safe’. Local authority or government grants may be available to offset some of these extra costs, but funds available are limited. Funding from your bank may be available, but interest costs are an additional burden.

There is another source of funding to consider. In the recent Budget, the Chancellor announced an extension to the loss relief provisions for corporation tax so that trading losses made in accounting periods ending between 1 April 2020 and 31 March 2022 can be carried back three years rather than the usual one year. A similar extension is available to unincorporated businesses for losses made in the 2020/21 and 2021/22 tax years. The amount of loss that can be carried back to the most recent year is unlimited, but there is a cap of £2 million on the loss that can be carried back to each of the prior years and there are some additional considerations for groups of companies.

So for businesses that have experienced a loss in the last year, getting your accounts and tax returns prepared early and filing these with HMRC could unlock a repayment of tax paid in previous years and bring some much-needed positive cash flow. 

Add comments

Related services

Share your thoughts

*These fields are mandatory

Comments