There is often confusion between the three terms in this heading, but there are distinct differences between each:

Wrongful Trading

Wrongful trading is when a company has entered into insolvent liquidation and prior to the commencement of the winding-up the directors knew or ought to have known that there was no reasonable prospect that the company would avoid insolvent liquidation.

Wrongful trading is a civil offence, so directors found guilty can be held personally liable for the company’s debts. They may also face disqualification as a director for a period of up to 15 years.


When the decision has been made to wind up a dormant Company and to distribute any remaining assets to the shareholders there are essentially two ways in which this can be done:

- Informal strike off
- Formal MVL

Tax implications

Under current legislation, where distributions in anticipation of informal striking off total £25,000 or more, any such distribution would be treated as income rather than a capital gain.

If we look what this means for tax payers; a basic rate tax payer would pay no further income tax; higher rate tax payers would pay an effective 25% rate and additional rate payers an effective 36.11%, compared to capital gains tax rates of 18% for basic rate and 28% for higher and additional rate.

In certain circumstances shareholders may be able to receive funds taxed at 10%, if the capital gain qualifies for Entrepreneurs’ Relief.


Where a property is let fully or substantially furnished, an expense deduction is available equal to 10% of the rental income as an allowance against the costs of renewing furniture and furnishings. This was originally introduced to help landlords simplify their record keeping.

From April 2016, this allowance will be abolished and replaced with a deduction based on the “actual costs of replacing furnishings”

The government has launched a consultation about the best way to implement this change, and it suggests that the rule change in 2013 concerning the replacement of freestanding white goods in “unfurnished” accommodation could be reversed.

It is suggested that the cost of replacing the following:

•        movable furniture or furnishings, such as beds or suites
•        televisions
•        fridges and freezers
•        carpets and floor-coverings
•        curtains
•        linen
•        crockery or cutlery
•        beds and other furniture,

will be an allowable expense deduction.

The replacement of fixed fittings will still be allowed as a repair, but the initial cost of buying or installing new equipment will not be allowable, neither will the cost of improvements to existing furnishings, such as replacing a fridge with a fridge/freezer.

Given the circumstances our current advice is that landlords of furnished lettings, who currently claim the wear and tear allowance, should try and avoid replacing items of furnishings before 6th April 2016 as there might be additional tax allowances available for them after that time.

If you want to know more about what this could mean for you, or if there is anything that can be done to minimise the impact on your after tax income, please contact Ian Huggett on 01271 374138 or email

Disqualifications of directors have been increasingly brought to our attention over the past few years through the use of social media and other outlets. Of course, Companies House keeps a database of disqualified directors, but your ‘average Joe’ is more likely to be surfing Twitter and LinkedIn than searching through Companies House. I thought it would be useful to have a look at some of the causes of disqualification and what it means for the directors involved.


During 2015, Thomas Westcott has strengthened the services it can offer to the farming community with the introduction of Sally Nicholls, who has joined the firm as an agricultural consultant.  Sally has a vast range of experience, working within the agricultural community across Devon. 

Sally’s thoughts on 2015 are:

“2015 has been an eventful year so far, whilst we were all preparing for the new Basic Payment Scheme and getting to grips with new rules, greening requirements and the very slow online system, the RPA were full of reassurance that as the weeks went on increased functionality would be available.  Then out of the blue, the plug was pulled on the online system and we were back to the good old days of paper based applications.  With all the delays, and agents panicking about how they were going to get all of their applications submitted before 15th May, the EU and the RPA threw us a lifeline and extended the deadline to the 15th June.


CLICK HERE to read our Summer Budget Welfare Summary.


If you have any questions regarding the summary please contact Steven Fitzgerald on 01392 288555 or


CLICK HERE to read our 'easy to understand' Summer Budget Summary.


If you have any questions regarding the summary please contact Michael Marsh on 01392 288555 or



The new Countryside Stewardship (CS) scheme opened on the 1st July 2015.  CS replaces Environmental Stewardship, the English Woodland Grant Scheme and Catchment Sensitive Farming.

Countryside Stewardship comprises of three elements:

• Mid Tier – multi-year agreements for environmental improvements in the wider countryside
• Higher Tier – multi-year agreements for environmentally significant sites such as SSSIs, common land and woodlands
• Capital Grants – a range of one to two year grants for hedgerows and boundaries, improving water quality, and woodland management plans and tree health.

Unlike Environmental Stewardship, CS is competitive and applications will be scored based on the environmental priorities for your area.  This will depend upon which National Character Area (NCA) you are in.  If you would like to know what the statement of priorities are for your area then please contact us.  Only the highest scoring applications will be selected for CS.

If you are already in an Environmental Stewardship scheme that expires after 2015 then you will not be invited to apply for CS until the year of expiry, but for those whose schemes expire this year, or those not already in Environmental Stewardship then you can apply this year.  The deadline for application is 30th September 2015 and the agreement would start on 1st January 2016.  If you find you are unsuccessful this year you can apply again next year.

If you have any queries regarding Countryside Stewardship or you would like help with an application then please do not hesitate to contact Sally Nicholls on 01237 472 725.

1 August 2015

  • Payment of corporation tax liabilities for periods ended 31 October 2014 if not liable to pay by instalments.
  • Outstanding 2013/14 self-assessment tax returns now subject to a penalty of £300 or 5% of tax due whichever is higher (in addition to previous late filing penalties).

2 August 2015

  • Filing date for form P46(Car) for quarter ended 5 July 2015.

Read more ...

Head of our Manufacturing & Technology specialist team, Chris Hill, recently participated in a regional round table discussion on R&D Tax Credits, organised by Insider.

Whilst R&D Tax Credits have been available to businesses that innovate and develop new products and services since 2001, recent figures suggest that only 15% of activity that would qualify to benefit from this tax incentive is actually subject to a claim for tax credits.

Read more about the discussion here