Finance Act 2002

Delayed payment of emoluments

113 (1) Where—

(a) a debit in respect of emoluments is recognised by a company for accounting purposes, and

(b) the emoluments are not paid until after the end of the period of nine months beginning with the end of the period of account in which the debit is recognised,

the emoluments shall be brought into account for the purposes of this Schedule only when they are paid.

(2) For the purposes of this paragraph—

(a) “emoluments” means emoluments allocated either—

(i) in respect of particular offices or employments (or both), or

(ii) generally in respect of offices or employments (or both); and

(b) emoluments are paid when they are treated as received (applying the rules in section 202B of the Taxes Act 1988 as for the purposes of section 202A(1)(a) of that Act (receipts basis of assessment for Schedule E)).

(3) This paragraph applies to potential emoluments as it applies to emoluments.

For this purpose—

(a) potential emoluments are amounts or benefits reserved in the accounts of an employer, or held by an intermediary, with a view to their becoming emoluments, and

(b) potential emoluments are regarded as paid when they become emoluments that are paid.

(4) Any adjustment required by this paragraph of an accounting debit that is partly referable to an amount to which this paragraph applies and partly to other matters shall be made on a just and reasonable basis.

(5) If a calculation for tax purposes has to be made before the end of the period of nine months mentioned in sub-paragraph (1)(b) and emoluments have not been paid—

(a) it shall be assumed for the purpose of making the calculation that they will not be paid before the end of that period, but

(b) the calculation shall be adjusted if the emoluments are subsequently paid before the end of that period and a claim is made.

Any such claim to adjust a calculation must be made to the Inland Revenue before the end of the period of two years beginning with the end of the period of account concerned.