After the flood come taxing times Tuesday 7 August 2007 PDF Print Uninsured or underinsured business owners whose premises suffered flood damage can benefit from major tax savings – but only if they stick to the rules. The tax implications of tackling flood-wrecked premises and equipment are critically important to getting a business back on its feet, says David Teale, director of Tax at UK top 30 accountancy and advisory firm DTE. For example, demolition followed by a rebuilding programme is unlikely to qualify for immediate tax relief, whereas expenditure on repairing damaged property would be. “Repairing or restoring a building to its original condition will generally be an allowable expense for tax purposes, “ says Teale. “If major items of equipment have been ruined in the floods it should be possible to write off the cost of that equipment for tax purposes, provided it has not been allowed previously. “Any new equipment will qualify for tax relief, although this is usually spread over several years. This can vary depending on the type of plant involved and the size of business, so professional advice should be sought before making major reinvestment decisions.” However, any insurance or compensation received for ‘loss of profits’ will be taxable in the same way as normal trading profits – an important point to bear in mind. Teale continues: “Probably the last thing that any small business has in mind when faced with water three feet or more deep on its premises is the tax implications of the recovery process. Nevertheless, traders may very soon be faced with making commercial decisions on how to incur or recover expenditure on the cost of restoring their premises. Depending on the choices they make, tax outcomes could be extremely favourable or equally disappointing.” Teale adds that where insured companies are concern, the tax implications of repairing flood damage are broadly neutral. “As long as the cost of repairing damage is covered by an insurance claim, there is no net cost to the trader, and therefore no tax implications,” he says. -ENDS- Media inquiries: David Chadwick (Public Relations) on 01204 497085, mobile 07905 859686 Notes to editors: DTE is a professional services group, ranking in the UK top 30 accountancy practices, with a turnover of £18m. The firm employs over 200 staff and delivers a full service offer from offices in Manchester, London, Birmingham, Bury, Blackburn and Wolverhampton. This press release was distributed by ResponseSource Press Release Wire on behalf of Chadwick Corporate Communications Ltd in the following categories: Men's Interest, Food & Drink, Personal Finance, Business & Finance, Farming & Animals, Retail & Fashion, Manufacturing, Engineering & Energy, Transport & Logistics, Construction & Property, for more information visit http://pressreleasewire.responsesource.com/about.