Corporation Tax Act 2009 section 133C

The disclosure condition

Section 133C defines the "disclosure condition" that must be met before a restriction on tax deductions for compensation payments applies to a company.

• The disclosure condition is met when a relevant document — such as statutory accounts, a directors' report, or a stock exchange listing disclosure — indicates that the company is, has been, or will become liable to pay compensation in respect of a particular matter, or refers to regulatory disciplinary action relating to that matter.
• A disclosure relating to compensation for a single error affecting only one customer is disregarded and does not trigger the condition.
• Relevant documents include the company's own statutory accounts and consolidated accounts, published directors' reports, and listing disclosures required under financial services legislation or equivalent overseas rules.
• The relevant time window covers the accounting period in which the compensation expenses are recognised plus any period beginning no more than five years before the end of that period.