Annex 1: Minor Changes in the Law Change 21: Trading income: payments to Export Credits Guarantee Department: section 91
This change allows payments to the Export Credits Guarantee Department (“ECGD”) to be deducted in calculating the profits of a trade when the expense is payable rather than when it is paid.
It brings the income tax and corporation tax codes back into line.
Section 88 of ICTA allows a company carrying on a trade to deduct “sums paid” to the ECGD in calculating the profits of that trade.
Section 91 follows accounting treatment in allowing traders to deduct a payment to the ECGD at the time it is payable.
This change will not alter the amount charged to tax. The most it will do is affect the timing of the tax liability. In a small minority of cases this could mean a different rate of tax being applied, according to individual circumstances. Any overall tax effect is likely to be negligible.