Making losses, or less profit.

One of the more obvious effects of recession is a downward trend in profit creation, and if your business is badly affected, making losses. The notes that follow set out a few ideas for capitalising on the tax planning opportunities this affords.

  1. Self assessment payments on account – if your current years profit is likely to be lower than the previous year, you may be able to elect to reduce the payments on account for the current year. The claim should be based on realistic trading results.
  2. Losses – if your business is currently making losses it may be possible to carry these losses back to previous years, when you may have paid significant tax. Any tax overpaid as a result can be reclaimed.
  3. Change of accounting date – in some circumstances it may be beneficial to either extend or reduce a company’s accounting period end to make use of a fall off in profitability. There are limitations to this type of planning so careful consideration of the facts is required.

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