What does section 183 of the Corporation Tax Act 2009 do?

Section 183 prevents a timing adjustment when a company changes its accounting basis and expenses were already fully deducted under the old basis. It preserves the original deduction, makes no change of basis adjustment for those expenses, and blocks any further deduction for them in future periods, avoiding double counting.

Why does section 183 CTA 2009 exist?

Without section 183, the normal change of basis adjustment under section 182 would add back expenses already deducted and then allow them to be claimed again over future periods. This creates an unfair upfront tax charge. Section 183 avoids this timing mismatch by simply preserving the original deduction and closing the matter off.

Can a company claim further deductions for expenses covered by section 183?

No. While section 183 preserves the tax deduction already given under the old accounting basis, it also prevents the company from claiming any further deduction for those same expenses in any accounting period after the change of basis. This ensures there is no double deduction under United Kingdom corporation tax law.

How does section 183 work in practice with a change of accounting basis?

For example, if a company fully deducted £60,000 of costs under the old basis but those costs would have been spread over three periods under the new basis, section 183 means no adjustment is made. The £60,000 deduction stands, but no further deduction for those costs is permitted in any future period.

Corporation Tax Act 2009 section 183

No adjustment for certain expenses previously brought into account

Section 183 deals with the situation where expenses have already been fully deducted under the old accounting basis, but would have been spread over several periods under the new basis.

This section applies when a change of accounting basis means that expenses already deducted would, under the new basis, have been spread across more than one period after the change.
No adjustment is made under the change of basis rules in respect of those expenses.
No further tax deduction is allowed for those expenses in any period after the change.
The effect is to preserve the deduction already given, without allowing a double deduction or requiring a timing adjustment.

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