Corporation Tax Act 2010 section 1128

"Grossing up"

Section 1128 explains how to calculate the gross (pre-tax) amount of a payment from which income tax has been deducted, a process known as "grossing up".

• Grossing up means working backwards from a net (after-tax) amount to find the original pre-tax figure at a given tax rate.
• The grossed up amount equals the net amount plus the income tax that was deducted from it.
• The formula is: Grossed up amount = Net amount + (Net amount × (Tax rate / (100 − Tax rate))).
• This definition applies wherever the term "grossing up" is used throughout the Corporation Tax Acts.