Income Tax (Trading and Other Income) Act 2005 section 36

Unpaid remuneration

Section 36 restricts the timing of tax deductions for employees' remuneration that has been charged in the accounts but not yet paid.

• Where employee remuneration is charged in the accounts for a period and would otherwise be deductible, a timing restriction applies to the deduction
• The deduction is only allowed for that period if the remuneration is actually paid within 9 months of the end of the period of account
• If the remuneration is paid after the 9-month deadline, the deduction is instead allowed in the period of account in which payment is actually made
• This rule operates in addition to any other rules that determine whether a deduction is allowable in the first place