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HMRC internal manual

Business Income Manual

HM Revenue & Customs
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Specific deductions: employee benefit trusts: general-purpose EBTs: deductions for employers’ contributions: timing of deductions

S38 Income Tax (Trading and Other Income) Act 2005, S1290 Corporation Tax Act 2009

The timing of a deduction for an employer’s contribution to a general-purpose EBT (see BIM44535) depends on:

  • when it is deducted in accounts prepared in accordance with general accepted accounting practice (GAAP), and
  • whether the timing of that deduction is deferred for tax purposes by specific tax legislation.

Advice on accountancy issues

HMRC staff should consult an HMRC compliance accountant for advice as to whether the accounts have been prepared in accordance with GAAP.

Employee benefit contribution legislation

The timing of deductions for contributions may be deferred.

The employee benefit contribution legislation broadly matches:

  • the timing and amount of employers’ deductions for employee benefit contributions, and
  • the timing and amount of benefits received by employees in the form of money or assets which are taxable and subject to employers’ National Insurance Contributions (under Class 1, 1A or 1B).

Guidance on the timing of deductions under the employee benefit contribution legislation is at BIM44575.

Unpaid remuneration

For guidance on the general rules governing the timing of deductions for unpaid remuneration see BIM47130.