Annex 1: Minor Changes in the Law Change 22: Trading income etc: allow all FISMA levies and costs: sections 92, 104 and 1246 and Schedule 1 What the Act does
If section 76A(2)(e) of ICTA means that some costs are not allowable as a trading deduction it is difficult to explain why this is the case. So the trading income rule in section 92 is brought into line with the management expenses rule.
Section 76A of ICTA applies only to an “authorised person”. But section 76B apparently applies more widely. It is conceivable that an unauthorised person may make a payment within section 76A. There is no reason why such a person should not have a trading deduction. So section 92 is not restricted to authorised persons.
Section 76A of ICTA does not apply to an “investment company”. This rule was not changed when most of the rules about investment companies were amended to refer to companies with investment business. The rule applies only to give a deduction under Schedule D Case I. In the rare case of an investment company carrying on a trade there is no reason why it should not have a trading deduction. So section 92 does not exclude investment companies.
Amendments to section 155 of ITTOIA (see Schedule 1 to this Act) keep the income tax and corporation tax codes in line.
This change allows a deduction for some levies or costs that are not allowed by the source legislation.
This change is in taxpayers’ favour in principle and may benefit some in practice. But the numbers affected and the amounts involved are likely to be small.