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Home / Simons-Taxes /Business tax /Part B2 How are trade profits and losses calculated? /Division B2.5 Recognition of receipts and expenses in periods of account /Period in which receipt assessable or deduction allowable / B2.505 Anticipated and contingent losses
Commentary

B2.505 Anticipated and contingent losses

Business tax

In H Ford1, the company entered into contracts for the sale of grain from Argentina and undertook liability for detention of the ships. Labour troubles ensued and the ships were delayed. The company never admitted liability for a claim, and ultimately never paid it, but deducted the amount of the claim in its accounts. The amount of the claim was an anticipated liability only and was therefore inadmissible for tax purposes.

In Whimster2, the company,

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