Corporation Tax Act 2009 section 1253A

Contributions to flood and coastal erosion risk management projects: refunds etc.

Section 1253A deals with the corporation tax treatment when a company that claimed a deduction for contributions to flood and coastal erosion risk management projects subsequently receives a refund or compensation relating to that contribution.

• Where a company has claimed a management expenses deduction for a contribution to a flood or coastal erosion risk management project, any subsequent refund or compensation is caught by this section.
• The section applies whether the original contribution was a cash sum (in which case a refund may arise) or the provision of services (in which case compensation may arise).
• Refunds or compensation received by either the contributor or a connected person are within scope, and may be in the form of money or money's worth.
• The amount of the refund or compensation that is not already taken into account for corporation tax purposes is treated as taxable income subject to corporation tax.