Paragraph 10 Additional payments to redundant employees

Section 90^f1 is amended as follows.

For subsection (1) (expenditure that would be allowable as a deduction or eligible for relief under section 75 or 76 as expenses of management) substitute—

“(1)

Where a payment is made by way of addition to a redundancy payment or to the corresponding amount of any other employer’s payment and the additional payment would be—

(a)

allowable as a deduction in computing for the purposes of Schedule D the profits or losses of a trade, profession or vocation,

(b)

deductible under section 75 as expenses of management of a business, or

(c)

regarded as expenses payable for the purposes of section 76,

but for the permanent discontinuance of the trade, profession, vocation or business, the additional payment shall, subject to subsection (2) below, be so allowable, deductible or regarded notwithstanding that discontinuance.

If the additional payment—

(i)

is made after discontinuance, or

(ii)

is for the purposes of section 75 or 76 referable to an accounting period beginning after the discontinuance,

it shall be treated as made, or (as the case may be) as referable to the accounting period ending, on the last day on which the trade, profession, vocation or business was carried on.”.

After subsection (1) insert—

“(1A)

To the extent that the additional payment would, apart from this subsection, be regarded as expenses payable for the purposes of Step 5 in subsection (7) of section 76, it shall not be so regarded for the purposes of that subsection (or of subsection (1) above so far as relating to that section).”.