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Tax Enquiry

The HSKS Greenhalgh Taxation Services team encountered a situation whereby a client sold his business following which we completed the tax computations relating to the disposal.

The client then received an enquiry from HM Revenue & Customs advising him that a previous agent had made a claim to rollover a capital gain at the time the business was acquired, a number of years previously. This meant an increased tax liability and the Inspector was seeking a penalty.

From the revised computations, due to issues of timing, it was clear that losses arising were not able to be set against the capital gain. However, we decided to look at it again and by reviewing the management accounts we were able to make use of a little known tax rule. Having extended the accounting period, this allowed us to restate the computations and set the losses against the gain. The Inspector at first was somewhat reluctant but after some persuasion agreed to the adjustment which resulted in a tax saving of £12,000.

Being prepared to look a little harder for a solution to an unexpected problem paid dividends.