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Business interruption insurance: Are pay-outs taxable?

By Sarah Bradford, April 2021

Sarah Bradford looks at a test case on business interruption insurance and considers whether and how receipts from successful claims should be taxed. 

Business interruption insurance provides cover to compensate for losses where the business is severely disrupted or required to close as a result. The policy will usually provide compensation for the loss of net income as a result of the full or partial suspension of business operations. It will also cover normal operating expenses that the business has to continue to meet, such as rent and payroll costs, despite the suspension of the business activities. 

Covid-19 insurance cover? 

Business owners that had the foresight to include business interruption cover in their business insurance understandably expected that they would be covered for losses resulting from the forced business closures during

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