Explanatory note

This Order amends section 592 of the Income and Corporation Taxes Act 1988 (“ICTA”) in consequence of changes made by sections 38 to 46 of, and Schedule 6 to the Finance Act 2004 to the tax treatment of management expenses of companies. It has been made in consequence of an error in the Finance Act 2004, Sections 38 to 46 and Schedule 6 (Consequential Amendment of Enactments) Order 2004 (S.I. 2004/2310: “the original Order”).

Article 1 provides for the citation, commencement and effect of the Order.

Article 2 inserts a new subsection (4) in section 592, in place of that originally substituted by paragraph 30(2) of the Schedule to the original Order. The earlier subsection, substituted by the original Order, made section 74(1)(a) of ICTA override the subsection. The new subsection makes it clear that section 74 of ICTA does not preclude the claiming of a deduction under section 592(4) in respect of an employer’s contributions to a pension scheme where the employer’s profits are chargeable to income tax under Case I or II of Schedule D.

Article 3 revokes paragraph 30(2) of the Schedule to the original Order.

This Order does not impose new costs on business.