Commentary on Sections Overview Overview Section 207: Treatment of business start-up payments received in an overlap period
840.This section provides a special rule for business start-up payments. It is based on section 127 of ICTA.
841.The charge in ICTA is under Schedule D Case VI. But logically the income is trade profits.
842.The policy is that business start-up payments should be taxed only once. This section achieves that result directly, instead of by taking the income out of the calculation of trade profits. See Change 53 in Annex 1. There is a transitional rule in paragraph 49 of Schedule 2 to this Act to ensure that the new treatment applies only to payments received after 5 April 2005.
843.Paragraph 108 of Schedule 1 to this Act repeals section 127 of ICTA. Subsection (3) of that section treats business start-up payments as earned income and as relevant earnings. This Act preserves that treatment because the payments are brought into account as receipts of the trade.
844.Subsection (3) sets out in full what the “corresponding payments” are in Northern Ireland and reflects the effect of the devolution settlements. See Change 19 in Annex 1.