Mark Bramall, Corporate Director at Dyke Yaxley, has urged all businesses affected to make sure they meet the deadlines for any tax payments due.
“Dealing with the aftermath of a flood is a challenging time for any business, and although tax may not seem the most pressing issue for businesses trying to cope with the clean-up, complications can arise if you ignore it. Business owners will still need to make tax payments while dealing with all the other issues a flood brings such as cashflow pressure, the loss of business records, and making insurance claims.”
Mark said businesses would still need to pay out for their usual expenses, despite their income being seriously squeezed or stopping altogether.
“The payment deadlines set by HM Revenue and Customs will still come around, even for businesses crippled by flooding, so it’s extremely important that business owners don’t miss key dates. Don’t let the deadline slip by – start a conversation with HMRC in advance of the date your tax is due. Following past floods, they have shown a degree of leniency around filing deadlines, but you must give them prior warning of any possible delay.”
Mark said flooding would damage computers and cause many businesses to lose crucial paperwork, with books, receipts and other records needed for filing tax returns lost, possibly for good.
“Even a temporary loss could cause problems in meeting HMRC’s deadlines for filing corporation tax, VAT or self-assessment returns, and reconstructing records and bringing paperwork up to date as quickly as possible will be just as important as property recovery. While you get your business back on its feet and wait for your income to start again, liaison with HMRC and other creditors will be critical, so it’s wise to start a conversation with them as soon as possible.”
Mark said ideally most businesses would have flood cover as part of their property insurance so should be able to make a claim for damages.
“When it comes to repairs, expenses that are classed as ‘repair and refurbish’ will qualify for a tax deduction, although any improvements or enhancements would be treated as capital expenses and so may not qualify for a deduction against taxable profits.
“At a time when you’re facing the daunting prospect of clearing up after such a significant event, try not to ignore your day-to-day business responsibilities, even though it may seem easier said than done.”