Corporation Tax Act 2009 section 1237

Counselling and other outplacement services

Section 1237 allows investment companies to treat the cost of outplacement counselling and related services for departing employees as deductible management expenses.

• An investment company that pays for counselling or outplacement services for a current or former employee in connection with the end of their role can treat those costs as management expenses.
• Qualifying costs include the provision of outplacement services, payment or reimbursement of fees for such services, and payment or reimbursement of related travel expenses.
• The deduction is only available if certain conditions are met, as set out in section 310 of ITEPA 2003, with an additional condition applying specifically to travel expenses.
• This provision mirrors the equivalent rule for trading companies (found in section 73 of the same Act), ensuring that investment companies receive comparable tax relief for supporting employees through redundancy or other departures.