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HMRC internal manual

Business Income Manual

Specific deductions: crime (expenditure involving): blackmail and extortion: handling of cases

You should only raise the possible disallowance of an expense on the grounds that it is induced by blackmail or extortion if you find clear signs that it may be such a payment.

A disallowance on the ground that a payment was induced by blackmail or extortion may be easier to establish than a disallowance for a criminal payment (BIM43115 onwards). This is because payments induced by blackmail or extortion generally do not involve a criminal offence by the payer and so it may be easier to obtain agreement that a disallowance is due even when the blackmailer is not brought to justice. However, in some cases, similar problems of proof could arise. For example, the payer may argue that payments were for ’security’ services and no blackmail threat was made.

Seek advice from CTISA (Technical) at an early stage if you are not sure whether a payment was induced by a blackmail offence under UK law.