Corporation Tax Act 2009 section 133B

Companies affected by section 133A: amounts treated as received

Section 133B requires companies that have had compensation-related expenses disallowed under section 133A to bring an additional notional receipt into account when calculating their trading profits.

• Where a company incurs expenses that are disallowed under the section 133A restriction on compensation payments, an additional charge applies
• A notional receipt equal to 10% of the total disallowed expenses must be included as a trading receipt
• This notional receipt is treated as arising at the end of the accounting period in which the expenses are disallowed
• The purpose of the charge is to reflect the administrative and other costs the company incurred in making the compensation payments that gave rise to the disallowance