And although it's a rather hackneyed comment, I find it intriguing that a political party is banging on about independence, the right to self-govern etc, yet is determined to remain shackled to Brussels. The truth is that it has nothing whatsoever to do with independence per se but is a reflection of the anti-English obsession that the Nationalists carry as two massive chips on their shoulders.
How far do you drill down, though? Scotland is part of the UK and as such are part of a democracy. The fact that a large proportion of Scotland voted to Remain is tough - that is what democracy is all about. Where I live, a very significant proportion voted against Independence. Assuming (and I accept that it's a bold assumption) that a second vote would be similar (but with an overall 'yes'), why should that part of Scotland be dragged out of the UK against its will?
I don't think that anyone is saying that HMRC are not entitled to challenge the deduction. However, they would need to be able to demonstrate that the directors view that the debt was impaired is unreasonable. There are no prescribed steps that the directors must take in arriving at their objective view of the recoverability of the debt.
Put it this way - if you were auditing the company accounts, what would be your view of debts that had remained unpaid after 3 years, despite at least some attempt to recover them? Would you consider suggesting to the directors that an impairment provision might be in order? Yes, I know, it will depend on the precise facts and circumstances.
Ask the Inspector to explain why he is referring to a statutory provision dealing with income tax. (Out of interest, where are you reading the words "where appropriate"?)
If he insists on citing BIM42705, direct him to the opening sentence.
If you look at one of HMRC's examples, you will find that they will accept an impairment loss properly calculated in accordance with empirical data, without any attempt whatsoever to recover the debt.
The requirement is that the directors take an objective view of whether or not a financial asset is impaired, based on the evidence in front of them.
There is no requirement, as far as I am aware, under FRS102 or any other standard that the company must take all legally available steps to recover the debt before it can be considered to be impaired. HMRC's own guidance reflects this.
HMRC are wrong. The stance taken regarding taking all reasonable steps etc might have had some validity before trade debt impairment fell within the loan relationship code. Provided that the debt is specific and properly recognised in GAAP-compliant accounts then tax simply follows the accounts. End of.
Refer the Inspector to the manual that begins "CFM" rather than "BIM"
My answers
I'm pretty sure that a certain Mr Cowell will also be very interested in this decision.
And although it's a rather hackneyed comment, I find it intriguing that a political party is banging on about independence, the right to self-govern etc, yet is determined to remain shackled to Brussels. The truth is that it has nothing whatsoever to do with independence per se but is a reflection of the anti-English obsession that the Nationalists carry as two massive chips on their shoulders.
How far do you drill down, though? Scotland is part of the UK and as such are part of a democracy. The fact that a large proportion of Scotland voted to Remain is tough - that is what democracy is all about. Where I live, a very significant proportion voted against Independence. Assuming (and I accept that it's a bold assumption) that a second vote would be similar (but with an overall 'yes'), why should that part of Scotland be dragged out of the UK against its will?
I don't think that anyone is saying that HMRC are not entitled to challenge the deduction. However, they would need to be able to demonstrate that the directors view that the debt was impaired is unreasonable. There are no prescribed steps that the directors must take in arriving at their objective view of the recoverability of the debt.
Put it this way - if you were auditing the company accounts, what would be your view of debts that had remained unpaid after 3 years, despite at least some attempt to recover them? Would you consider suggesting to the directors that an impairment provision might be in order? Yes, I know, it will depend on the precise facts and circumstances.
Ask the Inspector to explain why he is referring to a statutory provision dealing with income tax. (Out of interest, where are you reading the words "where appropriate"?)
If he insists on citing BIM42705, direct him to the opening sentence.
Yes - you can add anyone (me) as a shareholder and that will reduce your tax. I might even pay you for the shares.
Surely it's
Ho ho ho ho ho!
If you look at one of HMRC's examples, you will find that they will accept an impairment loss properly calculated in accordance with empirical data, without any attempt whatsoever to recover the debt.
The requirement is that the directors take an objective view of whether or not a financial asset is impaired, based on the evidence in front of them.
There is no requirement, as far as I am aware, under FRS102 or any other standard that the company must take all legally available steps to recover the debt before it can be considered to be impaired. HMRC's own guidance reflects this.
HMRC are wrong. The stance taken regarding taking all reasonable steps etc might have had some validity before trade debt impairment fell within the loan relationship code. Provided that the debt is specific and properly recognised in GAAP-compliant accounts then tax simply follows the accounts. End of.
Refer the Inspector to the manual that begins "CFM" rather than "BIM"