What are the new Covid 19 tax relief measures and what do they mean to me?
Greater flexibility for taxpayers in respect of statutory tax deadlines; Inland Revenue will be given greater flexibility to modify timeframes or procedural requirements for taxpayers who are impacted by COVID-19. More information to follow on this.
Changes to the tax loss continuity rules; The government is announcing a new ‘same or similar business’ test that enables companies to take on new investors without losing its tax losses due to the current shareholder continuity tests. This will be allowed if the business continues to be of a “same or similar nature” as the business it was carrying on when it made the losses. This new rule will apply from the 2020-21 Financial Year.
A tax loss carry-back scheme; Businesses expecting to make a loss in the 2019-20 and 2020-21 Financial Year will be able to carry back this loss against profits in the previous year, and receive a refund of the tax paid in the previous profitable year. This is a temporary loss carry-back scheme with a proposal for a new permanent carry-back scheme to apply to the 2021-2022 and later years.
Measures to support commercial tenants and landlords; The government is extending the timeframes required before landlords can cancel leases from 10 to 30 working days and mortgagees can exercise their rights to sale or repossession from 20 to 40 working days. These changes would still allow landlords to cancel leases and mortgagees to exercise their powers during the period that an epidemic notice is in force, but would allow for more time for breaches or defaults to be remedied.
Further business consultancy support: Businesses will be able to access free, tailored specialist support for a range of issues they may be currently facing, including business continuity planning, finance and cash flow management, HR and staffing issues, and potentially any sector-specific issues. The Regional Business Partner Network will scale up their existing advisory services so that more businesses can receive support over the next 12 months.