Use tax breaks to conquer coronavirus cash concerns, says North West expert
Businesses in the North West are being urged to make use of existing tax incentives to help them boost cashflow and overcome the coronavirus crisis.
Tony Medcalf, a tax partner at North West-based accountants and business advisors MHA Moore and Smalley, believes businesses should not forget the value of the support that was already on offer before the crisis.
He said: “The government has announced some outstanding business support measures since the pandemic came to light, and many businesses are making good use of measures like loans, grants and payment holidays.
“However, with so much going on it’s easy for businesses to forget about the tax incentives that already existed and can be vital in boosting cashflow.
“For example, business may look to bring forward existing tax claims by changing their accounting period, claim tax allowances for investment in new plant and machinery, or apply for tax relief for research and development activity.
“Cashflow can be the difference between life and death for the business, so business owners should be speaking with their professional advisors as soon as possible to make sure they capitalise on all the incentives available.”
To help businesses, MHA Moore and Smalley has produced a guide to the different tax reliefs and incentives that businesses may be able to employ to improve cashflow in their business.
Meanwhile, the firm has reminded businesses furloughing workers to ensure they remember that payments received under the Coronavirus Job Retention Scheme (CJRS) are classed as taxable income.
Tony added: “While, businesses can use the CJRS to continue paying their furloughed employees, they should remember the grants claimed back from government are considered as income on the company’s balance sheet and will be classed as taxable for the purposes of corporation tax.”