Operational and financial resilience: Managing tax risk on emerging from COVID-19

The scale of the impending financial crisis following COVID-19 is not yet known, or in the words of the Chancellor, “our economic emergency has only just begun.”

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The scale of the impending financial crisis following COVID-19 is not yet known, or in the words of the Chancellor, “our economic emergency has only just begun.”

Given unsustainable corporate debt in the UK alone is estimated to exceed
£100bn, many corporates will need to be resilient to survive. This may be
achieved through operational or financial restructuring.


Financial restructuring may involve debt releases, equity injections and
changes to terms of borrowing. These can have unexpected tax consequences
for the unwary. Tax payment deferrals, such as VAT, may aid tighter cash flow
management.


Operational risks present before the pandemic have been amplified. Now
COVID-19 has added complexities of its own to the picture. These include
disturbances to the supply chain and general operational disruption stemming
from social distancing and hygiene measures – not least the move to mass
working from home, all of which have tax consequences.

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FTI Consulting

In a rapidly changing tax landscape, our professionals deliver client-centric expert-led services focused on mitigating tax risk and minimising cost. As leaders in their field, the FTI senior management team members are qualified in accounting, tax, law, and surveying, and work alongside valuations and technology experts and economists to address clients’ most complex tax challenges. FTI’s team is one of the independent tax practices in the UK, and as a member of the WTS Global Network, they work alongside world-leading tax consultancies and law firms to provide solutions to clients at a cross-jurisdictional level. Our services include: Corporate tax compliance and reporting. International tax, Transaction tax, Restructuring tax advisory, Transfer pricing, Tax depreciation, Employment tax and reward, VAT and indirect tax compliance, R&D incentives, patent box and IP strategy, Real estate tax, Tax strategy and regulation advisory, Tax technology advisory, Tourism, hospitality and leisure.
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