Corporation Tax Act 2009 section 1249

Unpaid remuneration

Section 1249 restricts the timing of the deduction for employees' remuneration that a company with investment business charges in its accounts but does not pay promptly.

• Where employees' remuneration is charged in the accounts of a company with investment business and would normally qualify as deductible management expenses, the deduction is delayed if payment is not made within 9 months of the end of the period of account.
• If the remuneration is eventually paid after the 9-month deadline, the deduction is given in the period of account in which the payment is actually made, rather than the period in which it was accrued.
• If the remuneration is never paid, no deduction is allowed at all.
• This rule mirrors the equivalent provision for trading companies (section 1288 of the same Act) and ensures that companies cannot claim tax relief for remuneration that remains outstanding indefinitely.