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Stock relief

This definition must be read in a historical context.

For tax purposes this referred to the allowance given by the Inland Revenue against taxable profits of a company or sole trader to offset the inflationary increase in the value of closing stocks of saleable goods. When inflation was running at a high-level profit would be artificially swollen by the inclusion of closing stocks which, though constant in quantity, would have a considerably higher money value. The tax on this increase, being a levy on a non-existent profit, would have a painful effect on the cash-flow position of the business. In recent years, the Inland Revenue has attempted to minimize this problem by granting a temporary relief which was intended not to remove the tax burden but to defer it. The relief was abolished in the 1984 budget and liability for tax deferred was cancelled.

Reference: The Penguin Business Dictionary, 3rd edt.