38Restriction of deductionsU.K.
(1)This section applies if, in calculating the profits of a person's trade of a period—
(a)the profits of the trade of the period are required to be calculated for income tax purposes, and
(b)a deduction would otherwise be allowable for the period for any employee benefit contributions made or to be made by the person (“the employer”) (but see subsection (4)).
(2)No deduction is allowed for the contributions for the period except so far as—
(a)qualifying benefits are provided, or qualifying expenses are paid, out of the contributions during the period or within 9 months from the end of it, or
(b)if the making of the contributions is itself the provision of qualifying benefits, the contributions are made during the period or within 9 months from the end of it.
(3)An amount disallowed under subsection (2) is allowed as a deduction for a subsequent period so far as—
(a)qualifying benefits are provided out of the contributions before the end of the subsequent period, or
(b)if the making of the contributions is itself the provision of qualifying benefits, the contributions are made before the end of the subsequent period.
(4)This section does not apply to any deduction that is allowable for—
(a)anything given as consideration for goods or services provided in the course of a trade or profession,
(b)contributions under a registered pension scheme or under a superannuation fund to which section 615(3) of ICTA applies,
(c)contributions under a qualifying overseas pension scheme in respect of an individual who is a relevant migrant member of the pension scheme in relation to the contributions, or
(d)contributions under an accident benefit scheme.
For the purposes of paragraph (c) “qualifying overseas pension scheme” and “relevant migrant member” have the same meaning as in Schedule 33 to FA 2004 (see paragraphs 4 to 6 of that Schedule).
(5)See also—
section 39 (making of “employee benefit contributions”),
section 40 (provision of qualifying benefits),
section 41 (timing and amount of certain qualifying benefits),
section 42 (provision or payment out of employee benefit contributions),
section 43 (profits calculated before end of 9 month period), and
section 44 (interpretation of sections 38 to 44).