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HMRC internal manual

Business Income Manual

Specific deductions: staffing costs: employees seconded to charities

S70 Income Tax (Trading and Other Income) Act 2005, S70 Corporation Tax Act 2009

Where an employer makes available the services of an employee to a charity on a temporary basis, the expenditure on the remuneration etc of the employee may still qualify as an allowable trading expense.

The expenditure is allowable for secondments that are ‘expressed and intended to be temporary’. There is no definition of ‘temporary’ but in practice a secondment for three years or less should be accepted as ‘temporary’ without further enquiry.

A deduction is allowable in respect of expenditure that is attributable to the employment, so that not only the employee’s remuneration but also any pension contributions and employer’s NIC are deductible, if they continue to be met by the employer during the period of secondment.

‘Charity’ has the same meaning as in Sch6 Para1 Finance Act 2010. The well-known charities will be recognised as such. If there is doubt in a particular case whether a body is a charity, enquiry should be made to HMRC Charities.

For secondments to ‘local enterprise agencies’, see BIM47610.

For employees seconded to certain educational bodies, see BIM47120.