Corporation Tax Act 2009 section 1288

Unpaid remuneration

Section 1288 restricts the timing of a corporation tax deduction for employees' remuneration that remains unpaid more than nine months after the end of the period of account in which it is charged.

• Where employees' remuneration is accrued in a company's accounts but remains unpaid 9 months after the end of that period of account, the tax deduction is deferred — it cannot be claimed in the period in which it was charged
• If the remuneration is eventually paid after the 9-month deadline, the deduction is instead allowed in the period of account in which payment is actually made
• If the remuneration is never paid, no tax deduction is allowed at all
• A corresponding rule applies separately to expenses of management of a company's investment business under section 1249 of the same Act