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Company still classed as trading

If a company has ceased trading in one accounts period but has continued to pay insurance and loan repayments on a business loan into the next period, would it still be classed as trading?

If, the company were then to claim terminal loss relief, would it be able to claim the insurance and interest on loan payments that it has made in the AP after it has stopped trading?

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01st Jun 2011 10:38

What has the company been doing

... since it "ceased trading"? 

Cessation of income does not necessarily mean a cessation of trade.  If the company is still trading there would be some activity, though.

Are the directors quoting for work, preparing mailshots, drawing up plans for a project, etc?  The should at least be some record of meetings discussing the progress of this non-income producing trading.

Any terminal loss relief claim can only include expenditure up to the actual date of cessation.  You will have to determine this date from the activities undertaken after the income dried up.

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