Annex 1: Minor Changes in the Law Change 94: General calculation rules: exceptions to the rule restricting deductions for business gifts: section 1300
This change provides for the monetary limit on the cost of gifts excluded from the general rule prohibiting a deduction for such expenses (see section 1298 of this Act) to be increased by Treasury order.
It brings the income tax and corporation tax codes back into line.
Section 1300(3) of this Act is based on section 577(8)(b) of ICTA. The £50 limit in section 577(8)(b) of ICTA (previously £10) was inserted with effect in relation to accounting periods beginning on or after 1 April 2001 by section 73 of FA 2001 in line with an increase in the corresponding VAT provision made by Treasury order.
Section 577(8)(b) of ICTA was rewritten as it applied to employees by section 358(3)(b) of ITEPA. Section 716(2) of ITEPA provides that the Treasury may by order increase, or further increase, the sum specified in various provisions in ITEPA including the £50 limit in section 358(3)(b) of ITEPA.
Section 577(8)(b) of ICTA was rewritten as it applied to income tax on trades, professions and vocations by section 47 of ITTOIA. (Section 47 of ITTOIA is applied to other businesses for income tax purposes by sections 272 and 867 of ITTOIA.) Section 47 of ITTOIA provides that the Treasury may by order increase, or further increase, the £50 limit in section 47(3)(b) of ITTOIA.
Section 1300 of this Act brings the mechanism for changing the limit for corporation tax purposes into line with ITEPA, ITTOIA and the VAT provisions.
This change has no implications for the amount of tax due, who pays it or when. It affects (in principle and in practice) only administrative matters.