Tax – practical steps to improve cashflow position

Last updated 22 March 2020

Set out below are some practical steps you can take to improve your business’ cashflow position from a tax perspective:

• If your company is making Corporation Tax quarterly instalment payments on account (“QIPs”) based on projected profits, we would recommend you review these projections and the impact on the Corporation Tax liability. Careful consideration should also be given to whether the thresholds for QIPs under either the large company or very large company schemes are met.
• Eligible companies should be accelerating their Research and Development tax relief claims, which can reduce Corporation Tax liabilities, or if the enhanced tax relief results in a tax loss, this can be surrendered for a cash refund from HMRC.
• As well as accelerating their Research and Development tax relief claims, eligible companies should be maximising the claims.
• VAT registered businesses should ensure they are familiar with the bad debt relief rules which can result in the VAT charged on sales being recovered where your customer does not pay.
• VAT registered businesses should ensure they are correctly identifying and recovering the VAT they incur on purchases. As well as improving the current and future position there may be the opportunity to recover VAT on historic purchases.

We can provide advice and support on these areas and liaise with HMRC on your behalf if appropriate.  For further information and guidance, please get in touch.

For more advice on emergency cashflow management click here.

How can we help?

Our team is well resourced and experienced in advising companies and not-for profit organisations, allowing you to focus on managing your business during this trying period. We are set up to work from home so you can expect the same level of service, albeit remotely rather than in-person. We have:

• A team of debt advisory and corporate finance experts used to working with banks and other lenders, and can support you with CBILS and CCFF scheme applications. We understand how lenders are currently making credit decisions, and with the majority of the government lending schemes due to close at the end of March we can help with your application.
• Our restructuring and insolvency experts can advise businesses under stress about the options available to them.
• Our tax experts will also be on hand to advise you on applications to HMRC for the Time to Pay initiative, for corporate tax advice and R&D tax claims. We also have VAT & Duty experts who can support you in revising your VAT position.

Do call us on 0330 124 1399, via our enquiry form or speak to your usual Kreston Reeves contact.