Corporation Tax Act 2009 section 1221

Amounts treated as expenses of management

Section 1221 clarifies how certain amounts that are treated as expenses of management interact with the general rules on management expenses, particularly the prohibition on capital expenditure and the requirement that expenses relate to the company's investment business.

• The normal rule that prevents capital expenditure from being deducted as a management expense does not apply to amounts that other provisions of the Corporation Tax Acts treat as expenses of management.
• This override covers a wide range of specific items, including share incentive plan costs, employee share scheme set-up costs, employers' pension contributions, and manufactured dividend payments.
• Certain specified amounts — such as excess capital allowances, redundancy payments, payroll deduction scheme costs, retraining courses, outplacement services, seconded employee costs, flood risk management contributions, and Export Credits Guarantee Department payments — are deductible as if they were genuine management expenses of the company's investment business.
• For those specified amounts, the usual requirement that management expenses must be "in respect of" the company's investment business is also disapplied, meaning they qualify for deduction even if they do not directly relate to that business.