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HMRC internal manual

Business Income Manual

Specific deductions: crime (expenditure involving): blackmail and extortion: territorial limitations

Not all expenditure incurred by taxpayers in making payments in response to blackmail or extortion, in the popular meaning of those words, is disallowable. A disallowance is possible only if there is an offence under the relevant law in England or Wales, Northern Ireland or Scotland. Some taxpayers, particularly those with operations abroad, may make payments in response to blackmail or extortion in the popular sense but there may be no offence over which the UK has jurisdiction.

The extension of the disallowance for criminal payments to certain payments made outside the UK does not cover payments induced by blackmail or extortion.