Income and Corporation Taxes Act 1988

86 Employees seconded to charities and educational establishments. U.K.

(1) [F1 M1 If a company (“the employer”) carrying on a trade, profession or business for the purposes of which it] employs a person (“the employee”) makes available to a charity, on a basis which is expressed and intended to be of a temporary nature, the services of the employee then, [F2 notwithstanding anything in section 74, 75 or 76, any expenditure incurred] by the employer which is attributable to the employment of that employee shall continue to be deductible in the manner and to the like extent as if, during the time that his services are so made available to the charity, they continued to be available for the purposes of the employer’s trade, business [F3 or profession].

(2) In subsection (1) above—

• “charity” has the same meaning as in section 506;

• [F4 “deductible” means—

  (a)

  deductible as an expense in computing the profits of the employer to be charged [F5 to corporation tax] under Case I or II of Schedule D,

  (b)

  deductible as expenses of management for the purposes of section 75, or

  (c)

  falling to be brought into account in accordance with section 76 as expenses payable which fall to be brought into account at Step 1 in subsection (7) of that section,

  as the case may be.]

(3) With respect to expenditure attributable to the employment of a person on or after 26th November 1986 F6 . . . , this section shall have effect as if the references to a charity included references to any of the following bodies, that is to say—

[F7 (a) in England and Wales, any body falling within subsection (4) below;

(b) in Scotland, any body falling within subsection (5) below;

(c) in Northern Ireland, any body falling within subsection (6) below; and]

(d) any other educational body which is for the time being approved for the purposes of this section by the Secretary of State or, in Northern Ireland, the Department of Education for Northern Ireland.

[F8 (4) A body falls within this subsection if it is—

(a) a local education authority;

(b) an educational institution maintained or otherwise supported by such an authority (including a grant-maintained school or a grant-maintained special school within the meaning of the Education Act 1996);

(c) an independent school, within the meaning of the Education Act 1996, whose registration under section 465 of that Act is final; or

(d) an institution within the further education sector, or the higher education sector, within the meaning of the Further and Higher Education Act 1992.

(5) A body falls within this subsection if it is—

(a) an education authority;

(b) an educational establishment managed by such an authority within the meaning of the Education (Scotland) Act 1980 (“the 1980 Act”);

(c) a public or grant-aided school within the meaning of the 1980 Act;

(d) a self-governing school within the meaning of the Self-Governing Schools etc. (Scotland) Act 1989;

(e) an independent school within the meaning of the 1980 Act;

(f) a central institution within the meaning of the 1980 Act;

(g) an institution within the higher education sector within the meaning of section 56(2) of the Further and Higher Education (Scotland) Act 1992; or

(h) a college of further education within the meaning of section 36(1) of that Act.

(6) A body falls within this subsection if it is—

(a) an education or library board within the meaning of the Education and Libraries (Northern Ireland) Order 1986;

(b) a college of education or a controlled, maintained, grant-maintained integrated, controlled integrated, voluntary or independent school within the meaning of that Order; or

(c) an institution of further education within the meaning of the Further Education (Northern Ireland) Order 1997.]

Textual Amendments

F1 Words in s. 86(1) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 60(2)(a) (with Sch. 2)

F2 Words in s. 86(1) substituted (28.9.2004 with effect in accordance with art. 1(2) of the amending S.I.) by The Finance Act 2004, Sections 38 to 40 and 45 and Schedule 6 (Consequential Amendment of Enactments) Order 2004 (S.I. 2004/2310), art. 1(2), Sch. para. 7(2)

F3 Words in s. 86(1) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 60(2)(b) (with Sch. 2)

F4 S. 86(2): definition of "deductible" substituted (28.9.2004 with effect in accordance with art. 1(2) of the amending S.I.) by The Finance Act 2004, Sections 38 to 40 and 45 and Schedule 6 (Consequential Amendment of Enactments) Order 2004 (S.I. 2004/2310), art. 1(2), Sch. para. 7(3)

F5 S. 86(2): words in definition of "deductible" inserted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 60(3) (with Sch. 2)

F6 Words in s. 86(3) repealed (retrospectively) by Finance Act 1999 (c. 16), s. 58(2)(5), Sch. 20 Pt. 3(14), Note

F7 S. 86(3)(a)-(c) substituted (with effect in accordance with s. 58(6) of the amending Act) by Finance Act 1999 (c. 16), s. 58(3)

F8 S. 86(4)-(6) inserted (with effect in accordance with s. 58(6) of the amending Act) by Finance Act 1999 (c. 16), s. 58(4)

Marginal Citations

M1 SOURCE-1983 s. 28; 1984 s. 33; 1987 s. 34