and this has been adjusted in the quarterly return. The example of Walsham Sausages Limited, referred to earlier, is again relevant.
4.3 Another example is a Corporation Tax refund, shown in the relevant accounts, which is overstated for some reason.
5 Use of Post Completion Relief or Buyer’s Relief
d) in a case that falls within paragraph (iii) of the definition of Tax Liability (use of Post Completion Relief or use of Buyer’s Group Relief ) five Business Days prior to the date on which the Tax would have been payable if the Relief in question had not been utilised; or 5.1 The drafting here is relatively complex as it is referring to tax that would have been payable, but such tax is not payable due to the use of a Buyer’s Relief. Again an example can help to shed some light on this clause: the tax computations in respect of the Last Accounts of the Company have to be resubmitted as the Tax Liability was understated. In the following accounting period the Company makes a trading loss: the Buyer decides that this loss will be carried back to cover the taxable profits in the Last Accounts under the provisions of Section 393A, ICTA. 5.2 There is a clear date in this situation when the Tax would otherwise have been payable: the Buyer has gained a benefit in that he is using losses that would otherwise have been carried forward, but the Covenantors have not been disadvantaged. It is therefore difficult to see any reasonable grounds for this clause being resisted. 5.3 If the transaction involves Completion Accounts it is very possible that the stub period from the Last Accounts Date to Completion shows a profit but that the post-completion period results in a loss. The tax computations for the stub period will never be submitted to HM Revenue & Customs, unless the accounting reference date is changed to Completion. It is therefore necessary to impute special rules that should apply; most of these rules are unstated as they are based on the assumption that the computations should be prepared as if this was a complete accounting period. However, due to the interface between these rules and the actual rules that will apply on a carry back of losses, there is a need to make an assumption that would not apply in practice. This assumption is that the length of period over which the post-completion losses can be carried back is deemed to be extended by adding the length of the stub period. This point has been addressed in the previous example of Stradbroke Pharmacies Limited.
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