Income Tax (Trading and Other Income) Act 2005 Explanatory Notes

Section 234: No adjustment for certain expenses previously brought into account

955.This section deals with the case where the old basis of calculation allowed a tax deduction but the new basis requires the deduction to be spread over several periods. It is based on paragraph 6 of Schedule 22 to FA 2002.

956.In the absence of this section there would be a positive adjustment within itemĀ 2 of step 1 of the calculation of the adjustment in section 231. That would produce the right result overall but the rule would take effect too early. Instead, no adjustment is calculated but no deduction is allowed in future for expenses that have already been taken into account.

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