Taxes Consolidation Act 1997 section 68

Short-lived businesses

Section 68 provides relief where a short-lived business (one that starts and permanently ceases within three years of assessment) has been overtaxed due to the interaction of the commencement and cessation rules.

• The section applies where a trade or profession commences and permanently discontinues within three tax years, and the profits charged to tax exceed the actual profits earned over the life of the business.
• The business owner may claim a reduction in the assessment for the penultimate year (the year before cessation) so that only actual profits for that year are taxed, ensuring overall taxation reflects actual profits earned.
• The claim must be made in writing to the inspector on or before the specified return date for the year of assessment in which the business permanently ceases (generally 31 October following that tax year).
• A trade or profession that ceases due to the death of the person carrying it on is treated as a permanent discontinuance, so this relief also applies in such circumstances.