Corporation Tax Act 2009 section 133K

"Compensation" and related expressions

Section 133K defines the meaning of "compensation" and related terms used in the rules that restrict tax deductions for compensation payments arising from regulatory and other misconduct.

• Compensation paid "in respect of" misconduct includes not only direct liability payments but also voluntary, discretionary or ex gratia payments made in connection with a customer's claim or where there is reason to suspect the company may become liable
• "Compensation" is defined broadly to include any form of redress, whether monetary or non-monetary, and specifically includes interest and amounts relating to a customer's expenses in pursuing a claim
• A "claim" for these purposes includes any claim or request however it is made, whether formal or informal
• References to "payment" throughout these provisions are to be read consistently with this broad definition of compensation, so they cover non-monetary redress as well as cash payments