Corporation Tax Act 2009 section 865

Debits for expenditure not generally deductible for tax purposes

Section 865 prevents companies from claiming tax deductions under the intangible fixed assets regime for certain categories of expenditure that are blocked from deduction elsewhere in the tax code.

• No debit may be recognised for tax purposes under the intangible fixed assets rules if the expenditure falls into a category that is not generally deductible for tax purposes.
• Expenditure is treated as not generally deductible if, had it been revenue expenditure incurred for the purposes of a trade, it would have been disallowed under one of four specified provisions.
• The four blocked categories are: car hire costs, business entertainment and gifts, crime-related payments, and expenditure on benefits under employer-financed retirement benefits schemes.
• This rule ensures that expenditure which would be disallowed in a normal trading context cannot be brought in through the back door via the intangible fixed assets regime.