Taxation (International and Other Provisions) Act 2010 Schedule 7 Part 4

Costs of setting up SAYE option scheme or CSOP scheme

Schedule 7 Part 4 (paragraphs 25–29) relocates the income tax rules on deducting the costs of setting up approved Save As You Earn (SAYE) option schemes and Company Share Option Plan (CSOP) schemes, previously found in section 84A of ICTA 1988, into new section 94A of the Income Tax (Trading and Other Income) Act 2005.

• Companies can claim a tax deduction for expenses incurred in setting up an HMRC-approved SAYE option scheme or CSOP scheme, provided no employee or director acquires rights under the scheme before approval is granted.
• The deduction is made when calculating the trading profits of the company for income tax purposes; it also applies to the profits of a property business by virtue of the amendment to section 272 of ITTOIA 2005.
• If HMRC approval is given more than nine months after the end of the accounting period in which the set-up costs were incurred, the deduction is instead made in the accounting period in which approval is given.
• This provision primarily affects non-UK resident companies whose trade or property business profits fall within the income tax charge, since UK-resident companies will normally be subject to corporation tax and use the equivalent relief under section 999 of CTA 2009.