Corporation Tax Act 2009 section 1228

Credits that reverse debits

Section 1228 defines when a credit is treated as reversing a debit for the purposes of the claw-back of management expense relief.

• A credit reverses a debit when a sum originally recognised as an expense is later repaid in whole or in part
• A credit also reverses a debit when the sum represented by the debit is never actually paid
• This definition applies specifically for the purposes of the claw-back provisions in sections 1229 and 1230
• The effect is to ensure that tax relief given for management expenses is recovered where the underlying cost is refunded or was never incurred