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HMRC internal manual

Business Income Manual

Specific deductions: staffing costs: remuneration paid after cessation

S254 Income Tax (Trading and Other Income) Act 2005, S196 Corporation Tax Act 2009

Remuneration which remains unpaid nine months after the end of the period of account in which the trade ceases, or is deemed to cease for tax purposes, is not deductible in computing the profits of that period of account under the rules at BIM47130 onwards.

Where the ex-trader is chargeable in respect of any post-cessation receipts of the trade for a tax year or accounting period, any remuneration for which a deduction has not been allowed, and which would have been an allowable deductions in calculating the trade profits for that year or period if it had continued, is deductible from the post-cessation receipts.