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HMRC internal manual

Business Income Manual

Specific deductions: staffing costs: timing of deductions: returns submitted within the nine month period

S36, S37 Income Tax (Trading and Other Income) Act 2005, S1288, S1289 Corporation Tax Act 2009

Where the trade profits are calculated before the end of the nine-month period after the end of the period of account, and at that time some remuneration charged in the accounts remains unpaid, the calculation must be made on the assumption that the remuneration will not be paid before the expiry of the nine months. This means that the unpaid remuneration must be added back in computing the taxable profits.

If the remuneration is subsequently paid before the end of the nine-month period, the calculation of profits can be revised and the employer can amend their tax return accordingly (within the normal time limits for doing so).