Income Tax (Trading and Other Income) Act 2005 section 55

Crime-related payments

Section 55 restricts the deduction of certain crime-related payments from trading profits, but Schedule 2 paragraph 18 provides a transitional rule for older expenditure.

• Section 55(1)(b) disallows deductions for certain payments connected with criminal activity when calculating trade profits.
• However, this restriction does not apply to expenditure incurred before 1 April 2002.
• Expenditure incurred on or after 1 April 2002 that falls within section 55(1)(b) cannot be deducted from trade profits.
• This transitional provision ensures that the rule is not applied retrospectively to historic spending.