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Withdrawal of CT concession for employer compliance settlements

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From 30 September 2019, HMRC is to withdraw its concession allowing an early CT deduction for certain employer compliance settlements involving PAYE or CIS liabilities.

This concession is contained in HMRC’s Business Income Manual at BIM47090. The guidance indicated that in some circumstances, for example in the settlement terms relating to tax avoidance schemes, HMRC would by concession accept an earlier CT deduction for employer liabilities than would otherwise be allowed under generally accepted accounting practice (GAAP).

HMRC has announced in its latest Employer Bulletin (issue 74), now confirmed in BIM47090, that the concession will be withdrawn for employer compliance settlements entered into after 30 September 2019, as it departs from the statutory treatment that the timing of deductions must follow GAAP (subject to any tax law that overrides this).

Issue: 1417
Categories: News