Corporation Tax Act 2009 section 72

Payroll deduction schemes: contributions to agents' expenses

Section 72 allows employers operating payroll giving schemes to claim a tax deduction for contributions they make towards the administrative expenses of the approved agent running the scheme.

• Employers who operate an approved payroll deduction scheme and pay withheld charitable donations to an approved agent may claim a trading deduction for payments made to cover the agent's administrative expenses.
• The deduction covers agent expenses already incurred or expected to be incurred in connection with the agent's role under the scheme.
• Without this provision, voluntary payments to cover an agent's costs would not normally qualify as a trading deduction, since they are not made wholly and exclusively for the purposes of the trade.
• The relief ensures that employers who choose to absorb the agent's costs — so that employees' full donations reach their chosen charities — are not penalised for doing so.