Stolen Cash

Stolen Cash

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A sole trader has had cash stolen from a safe on his business premises.The burglary took place with forced entry and has been reported to the police. He will not claim on his insurance as he had exceeded the cash limit allowed under the policy and does not want his premium to increase. Can he claim this loss in his accounts and get tax relief through the p&l.
Stephen Quay

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David Winch
By David Winch
13th Apr 2005 21:22

A classic example

Stephen

This is a classic example of the ridiculous effects of the Proceeds of Crime Act 2002 (PoCA) and Money Laundering Regulations 2003 (MLR).

Under section 330 of PoCA you are obliged to report this to NCIS, since you know or suspect that some (unknown) person has had possession of the proceeds of a crime (the cash they stole) and this information came to you in the course of an activity in the 'regulated sector' (in this case accountancy work or tax advice).

Your report to NCIS will be utterly useless to the authorities since the police have already been informed of, and investigated, the theft.

The law will be changed when section 104 of the Serious Organised Crime and Police Act 2005 is brought into effect. This will amend section 330 of PoCA so that a report will no longer be required where you have no useful information concerning the identity of the alleged offender nor the whereabouts of the proceeds of the crime.

Some slight moves towards common sense in this legislation!

If you are an MLRO you can get confidential one-to-one email support, information and NewsAlerts from my website www.mlrosupport.co.uk.

David
[email protected]

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By Taxboss
14th Apr 2005 10:14

some good news
there should be no problem claiming bad debt relief (and obtaining income tax/corporation tax relief accordingly) particularly if Police involved.

please note however that VAT output tax is still payable to Customs & Excise.

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By AnonymousUser
14th Apr 2005 16:49

Bad debt relief?
I may be thick but how can bad debt relief give relief where cash has been stolen? This is not a bad debt !

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Stephen Quay
By squay
15th Apr 2005 11:06

Thanks for all the posts. I too had read the IR business manual at 45851. Unfortunately it doesn't point to any legislation reference but I shall assume if it's in print it's good enough.

I can't find anything on Windup vs Baiting. Does anyone have a link?

My next step will be to get a statement from the client, crime reference number, etc and review the claim. Once again thanks for all your help.

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By Taxboss
15th Apr 2005 10:49

some good news (again)
Inland Revenue Business Manual BIM45851 confirms the availability of the deduction

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By andymeeson
15th Apr 2005 12:06

Windup v Baiting
Unless I'm very much mistaken, this is a development of the judicial doctrine in Swallow v Hook, Line, & Sinker.

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