Insolvency ― points to consider when administering an insolvent business

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note looks at a number of the key VAT considerations to be taken into account when administering an insolvent business.

For insolvency more broadly, see the Insolvency ― overview guidance note.

For in-depth commentary on the legislation, see De Voil Indirect Tax Service V5.187.

What if an insolvent business is partly exempt?

Broadly, partial exemption applies where a business makes a mixture of taxable and exempt supplies, and as a result may not be entitled to recover all the VAT it incurs on costs. Partial exemption is covered in the Partial exemption ― overview guidance note. Partial exemption requirements continue to apply to insolvent businesses.

Consideration of partial exemption methods

In the context of insolvency, partly exempt businesses should consider whether their existing partial exemption recovery methods remain appropriate and result in a ‘fair’ recovery of input tax (given what is likely to be a significant change in circumstances). For example, a business operating the standard method (see the Partial exemption ― de minimis rules guidance note)

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

Popular Articles

Owner-Managed Businesses

SEIS and EIS ― overview

SEIS and EIS ― overviewThe seed enterprise investment scheme (SEIS) and enterprise investment scheme (EIS) are very similar schemes which offer substantial tax incentives to investors in companies which qualify. The tax incentives for SEIS and EIS investments are intended to encourage investment in

14 Jul 2020 13:31 | Produced by Tolley Read more

Personal Tax

Payment of tax due under self assessment

Payment of tax due under self assessmentNormal due dateIndividuals are usually required to pay any outstanding income tax, Class 2 and Class 4 national insurance, and capital gains tax due for the tax year by 31 January following the end of the tax year (ie 31 January 2025 for the 2023/24 tax year).

14 Jul 2020 12:52 | Produced by Tolley Read more

Corporation Tax

Withholding tax

Withholding taxIntroductionUK tax must be withheld on UK payments including:•interest•royalties•rental incomeUK withholding tax may be reduced under the provisions of a double tax treaty (DTT). Prior to 1 June 2021, payments of interest and royalties made to EU resident associated companies were

14 Jul 2020 14:01 | Produced by Tolley Read more

��Ƶ