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HMRC internal manual

Company Taxation Manual

Corporation Tax: management expenses: statutory provisions

CTA09/Part 16/Chapter3

Chapter 3 makes provision for certain expenses to be treated as expenses of management within CTA09/S1219(1)

Staffing Costs

  • CTA09/S1239 treats as expenses of management statutory redundancy payments made under the legislation specified:


  • Part 11 of The Employment Rights Act 1996 and
  • Part 12 of the Employment Rights(Northern Ireland) Order 1996

Under CTA09/S1242 additional payments up to a maximum of three times the amount of the statutory redundancy payment will be eligible for relief as expenses of management.

Where a ‘company with investment business’ claims redundancy payments as management expenses, you should follow the detailed guidance at BIM47200 onwards.

  • CTA09/S1236 treats the employers expenses of operating a payroll giving/payroll deduction scheme as expenses of management. Employees may authorise their employers to deduct gifts to charities from their pay.  The employers must pay the gifts over to an agency approved by HMRC. 
  • There is relief under CTA09/S1235 for expenditure attributable to the employment where a ‘company with investment business’ makes available the services of an employee to a charity (or to certain educational establishments) on a temporary basis.  In such a case the expenditure on the remuneration and related costs of the employee may still qualify as an expense of management.  There is detailed guidance for trading companies on employees seconded to charities at BIM47115 and to educational establishments at BIM47120.
  • CTA09/S1234 treats as an expense of management a payment made or any other valuable consideration given to an employee in respect of a restrictive undertaking where that payment is taxed as earnings by ITEPA03/S225.
  • CTA09/1238 allows relief for costs of retraining employees
  • CTA09/S1237 allows the costs of counselling services for employees.

Other expenditure

  • CTA09/ S1244 allows contributions to local enterprise organsisations and to urban regeneration companies. These bodies are defined in CTA09/S83 and S86 respectively


  • CTA09/S1245 treats certain sums paid by a person to the Export Credits Guarantee Department under investment insurance schemes as management expenses, whether or not the sums would be allowable on normal principles.  There is guidance on the Export Credits Guarantee insurance scheme at BIM45580.
  • CTA09/S1246 allows, as expenses of management, levies and other expenditure incurred under Financial Services and Markets Act 2000 (FISMA)