What counts as remuneration under Corporation Tax Act 2009 section 1250?

Under section 1250, remuneration covers any amount constituting or treated as earnings under Parts 2 to 7 of ITEPA 2003, including salary, bonuses, and benefits in kind. Provisions or accruals made with a view to becoming employees' remuneration are treated identically to amounts formally charged as remuneration in the accounts.

What happens if a company files its tax return before the nine-month unpaid remuneration deadline expires?

If the company files before the nine-month window closes, it must assume any remuneration still unpaid at the calculation date will remain unpaid and disallow the deduction. However, if payment is subsequently made before the nine months expire, the company may revise its profit calculation and amend its return to reinstate the deduction.

When is remuneration treated as paid for the purposes of section 1250?

Remuneration is treated as paid when it is regarded as received by the employee under ITEPA 2003 income tax rules — broadly the earliest of the date paid, the date the employee becomes entitled, or the date credited in the employer's records. This applies even if the payment is exempt from income tax in the employee's hands.

Does section 1250 apply to bonus accruals and general provisions for employee pay?

Yes. Section 1250 explicitly provides that amounts provisioned in the accounts that may become employees' remuneration are treated the same as amounts actually charged as remuneration. It also makes no difference whether the charge relates to specific named employments or to employments generally — the unpaid remuneration restriction applies equally.

Corporation Tax Act 2009 section 1250

Unpaid remuneration: supplementary

Section 1250 provides supplementary definitions and rules that support the main unpaid remuneration provision in section 1249, clarifying what counts as remuneration, when it is treated as paid, and how to handle tax returns filed before the nine-month deadline has expired.

Amounts provisioned in the accounts that may become employees' remuneration are treated the same as amounts actually charged as remuneration — so provisions for bonuses or other anticipated pay fall within the rules.
It does not matter whether the remuneration charge relates to specific named employments or to employments generally — the restriction on unpaid remuneration applies equally in both cases.
If the company calculates its profits (and submits its tax return) before the nine-month payment window has closed, it must assume any remuneration still unpaid at that point will remain unpaid — but if payment is in fact made before the nine months expire, the company may revise its calculation and amend its return.
Remuneration is treated as "paid" at the point it is regarded as received by the employee under the income tax rules (ITEPA 2003), or would be so regarded were the income not exempt; "employee" includes an office-holder and "remuneration" means amounts that count as earnings for income tax purposes.

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