The primary objective for an insolvency professional is the recovery of funds for the creditor(s). Capital allowances are a tax asset of the business with an easily quantifiable monetary value. It is best practice to tap into all sources of value and arguably negligent to the creditors to discard the Capital Allowances through ignorance of what can be achieved.
Receivership/administration and recovery professionals
Insolvency professionals are a key area of work for STax. We work closely with a wide range of firms to assist them in accessing all the value capital allowances present whilst protecting their practices for the risks of non-compliance.
Capital allowances are often overlooked when administrators or receivers are appointed. Whilst verifying details of past actions can be trick once the insolvency professional is appointed if there are unclaimed capital allowances available quantifying and claim this asset of the business, therefore recovering more for stake holders, is clearly best practice in this sector.
Due Capital Allowances can be carried back against past taxes paid potentially access further cash for creditors.
If in the likely instance there haven’t been profits for some time and therefore no tax liability to claim back, any Capital Allowance claimed can be potentially transferred on an incoming owner either for extra consideration or to help lubricate the deal to secure a favourable sale. Furthermore, if the asset is sold with no regard to the requirements of the Capital Allowances Act, the vendor can be subject to claw back of past relief, surprise tax charges being levelled and myriad of sharp practices being deployed by a well advised (potentially by STax) purchaser
Here at STax we have a wealth of experience advising insolvency professional to maximise the returns for creditors, apply forensic accounting techniques to verify Capital Allowances history and all time protecting the professional from the monetary and reputational risks of non-compliance.
But won’t the borrower’s accountants or auditors have done this already?
It is not likely they will have the relevant experience or sector knowledge to be able to provide the level of advice we can in this niche area. This fact is no negative reflection on them. Here in the UK we have a vast and complex set of legislation underpinning the tax systems. No one person or firm could be an authority on all of it. We work in conjunction with many general accountants in very much the same way as your GP might refer a patient to a heart specialist! From experience we know it is a very rare situation where we can’t add substantial value.
If you are interested in providing bets advice to you clients whilst also generating further revenues for your business, then get in contact with us today.