EXTENDED tax filing deadlines for businesses and the expansion of criteria for tax reliefs on flood defence projects have been proposed by institutes as northern areas of the UK commence their recovery after Storm Desmond.
ICAEW wants the government to help businesses hit by the floods with an extra three months to file VAT returns and pay the associated tax without penalties arising; an additional three months to file income tax and corporation tax returns and pay associated tax without penalties arising.
It also wants the government to fund local authorities to suspend collection of business rates for three months while businesses get back in their feet, and; for the government to provide guarantees to banks to enable assistance to affected businesses on a case-by-case basis.
The Association of Taxation Technicians (ATT), meanwhile, is urging the government to consider expanding the eligibility criteria for tax relief on contributions to flood defence projects.
At present, businesses that contribute to approved flood and coastal defence projects can deduct their contribution from the profits of the business for tax purposes, reducing their income tax or corporation tax bill. The ATT is suggesting the relief be expanded to enable individual taxpayers to make such contributions on a similarly tax-efficient basis, and could be done in a similar manner to Gift Aid or Payroll Giving.
Record levels of rainfall left thousands of homes without power in Lancaster, Cumbria and the Scottish Borders.
In Cockermouth, one of the worst affected areas with over 400 homes ravaged by the floods, Jordan Cooper, an associate partner at Tattersall Bailey Chartered Accountants, said a number of rooms in the office – which backs onto the river, are under a couple of feet of water.
“Fortunately we managed to put the PCs and client records above the water levels, but we’ve had to take the carpets up and the cupboards out of the kitchen area as the water, which is very dirty, leaves a mark,” he told Accountancy Age.
HMRC has already said it is providing “dedicated support” for those affected by Storm Desmond. Call 0800 9047900 to speak to advisers on payment options.
Chairman of ICAEW’s Practice Committee Peter Hollis said: “The last thing that businesses affected by flooding want to be worried about is meeting deadlines for tax returns. Their first priority will be getting back up and running again.
“Government should be doing all they can to help by automatically extending filing deadlines for businesses in affected postcodes, rather than on a case-by-case basis. This will make a major difference to those businesses which will need to file VAT, self-assessment and income and corporation tax returns in the next three months.”
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