Part 20General calculation rules
C1Chapter 1Restriction of deductions
Unpaid remuneration
1288Unpaid remuneration
1
This section applies if—
a
an amount is charged in respect of employees' remuneration in a company's accounts for a period,
b
the amount would, apart from this section, be deductible in calculating income from any source for corporation tax purposes, and
c
the remuneration is not paid before the end of the period of 9 months immediately following the end of the period of account.
2
If the remuneration is paid after the end of that period of 9 months, the deduction for it is allowed for the period of account in which it is paid.
3
No deduction is allowed for the remuneration if it is not paid.
4
Provision corresponding to that made by this section is made by—
a
section 1249 (in relation to expenses of management of a company's investment business), and
b
section 76ZL of ICTA (in relation to the expenses of insurance companies).
1289Unpaid remuneration: supplementary
1
For the purposes of section 1288 an amount charged in the accounts in respect of employees' remuneration includes an amount for which provision is made in the accounts with a view to its becoming employees' remuneration.
2
For the purposes of section 1288 it does not matter whether an amount is charged for—
a
particular employments, or
b
employments generally.
3
If the income is calculated before the end of the 9 month period mentioned in section 1288(1)(c)—
a
it must be assumed, in making the calculation, that any remuneration which is unpaid when the calculation is made will not be paid before the end of that period, but
b
if the remuneration is subsequently paid before the end of that period, nothing in this subsection prevents the calculation being revised and any tax return being amended accordingly.
4
For the purposes of this section and section 1288 remuneration is paid when it—
a
is treated as received by an employee for the purposes of ITEPA 2003 by section 18 or 19 of that Act (receipt of money and non-money earnings), or
b
would be so treated if it were not exempt income.
5
In this section and section 1288—
“employee” includes an office-holder and “employment” therefore includes an office, and
“remuneration” means an amount which is or is treated as earnings for the purposes of Parts 2 to 7 of ITEPA 2003.
Pt. 20 Ch. 1 applied by 1989 c. 26, s. 85(2BA) (as substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 348(4) (with Sch. 2 Pts. 1, 2))