Commentary on Sections Overview Chapter 1: Restriction of deductions Section 1288: Unpaid remuneration
3300.This section defers a deduction for employees’ (or an office-holder’s) remuneration in a period of account if that remuneration remains unpaid nine months after the period has ended. It is based on section 43 of FA 1989. The corresponding rule for income tax is in section 36 of ITTOIA.
3301.Section 43 of FA 1989 was introduced when the assessment of employment income was put on a receipts basis. A deduction for employees’ pay may be linked to the time when the pay is received by the employees.
3302.This section uses “income from any source” rather than “profits or gains”, to define the scope of the rule. See the commentary on the omission of “gains” in the overview of Part 3 of this Act. There is a separate rule for expenses of management in section 1249.
3303.Schedule 2 to this Act preserves the commencement rule for the amendment of the source legislation by Schedule 24 to FA 2003.