Mr and Mrs Thomas came to Sarah Woodall when they were denied the loss relief that they had expected, after losing loans of almost £1m in a business which they were trying to sustain.
They had borrowed the money in order to try to support the business but lost it when the company failed. Sarah said: “You can get loss relief if you invest money wholly for the purposes of the trade you carry on and you lose your money; this is designed to encourage entrepreneurs and investment in British industry. In this case there were also VAT issues and a claim was made wrongly.”
This prompted a lengthy HMRC investigation, leaving the Thomases in financial difficulty – they had lost their original investment, could not get the tax relief on it and were facing penalties for the claim made wrongly.
Sarah, who is a CEDR accredited tax mediator, said: “This was an instance where dealing positively with HMRC was effective. They have accepted that the incorrect claim was a mistake and have agreed to settle with no penalties – the majority of the loan made did qualify for loss relief.”