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

Section 70: Employees seconded to charities and educational establishments

289.This section allows a trader to deduct the cost of an employee seconded to a charity or educational establishment in calculating the trade profits. It is based on section 86(1),(2) and (3) of ICTA.

290.Section 86 of ICTA allows a trader who seconds an employee to a charity or educational establishment to deduct the cost of employing the seconded person to the extent that those costs would have been deductible if the employee continued to be employed for the purposes of the employer’s trade. This section allows the employer to deduct all costs attributable to the seconded employee during the period of the secondment, regardless of whether those costs would have been allowed if the employee had not been seconded. See Change 16 in Annex 1.

291.Subsection (3) defines “educational establishment” by reference to various bodies listed in section 71 and to any other educational body approved by “the Secretary of State or, in Northern Ireland, the Department of Education”. For the purposes of section 86 of ICTA and of this section, “the Secretary of State” is the Secretary of State for the Department for Education and Skills.

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