Income Tax (Trading and Other Income) Act 2005 section 207

Treatment of business start-up payments received in an overlap period

Section 207 ensures that business start-up payments received during a period that falls within two overlapping basis periods are only taxed once, by allocating them to the first basis period only.

• Where a non-lump-sum business start-up payment is received in a period that falls within two basis periods, it is only brought into account in the first basis period, preventing double taxation
• A business start-up payment is a payment under a Business Start-Up scheme (originally known as enterprise allowance), made by the relevant body in England and Wales, Scotland or Northern Ireland
• These payments are treated as trade receipts rather than being taxed separately, meaning they count as earned income and relevant earnings
• This treatment applies to payments received after 5 April 2005

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