Taxation in the United Kingdom/Legislation/Section 21A of the Income and Corporation Taxes Act 1988

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This section provides that, except where expressly provided elsewhere in the Taxes Acts, the profits of a Schedule A business are computed in the same way as the profits of a trade are computed for the purposes of Case I of Schedule D.

The following sections therefore apply to the calculation of profits under Schedule A in the same way as they apply to the calculation of profits under Schedule D:

The following provisions apply in accordance with subsection (1)-

  • Section 72 (apportionment);
  • the provisions of Chapter V of Part IV (computational provisions relating to the Schedule D charge), except as mentioned below;
  • Section 577 (business entertainment expenses);
  • Section 577A (expenditure involving crime);
  • Sections 579 and 580 (redundancy payments);
  • Section 588 (training courses for employees);
  • Section 589A (counselling services for employees);
  • Section 73(2) of the Finance Act 1988 (consideration for restrictive undertakings);
  • Section 43 of the Finance Act 1989 (deductions in respect of certain emoluments);
  • Sections 42 and 46(1) and (2) of the Finance Act 1998 (provisions as to computation of profits and losses).
  • Sections |196, 196A, 197, 198, 199 and 200 of the Finance Act 2004 (registered pension schemes);
  • Section 246 of the Finance Act 2004 (employer-financed retirement benefits schemes).

Section 74(1)(d) ICTA (disallowance of provisions for future repairs) applies in relation to a Schedule A business as if the reference to premises occupied for the purposes of the trade were to premises held for the purposes of the Schedule A business.

The following provisions that do apply for Schedule D purposes do not, however, apply for Schedule A:

  • Section 87 (treatment of premiums taxed as rent), and
  • Section 98 (tied premises: receipts and expenses treated as those of trade).

Part 1 of Schedule 22 to the Finance Act 2001 (deduction for capital expenditure on remediation of contaminated land) applies in accordance with subsection (1), and the other Parts of that Schedule (further provision as to relief for remediation of contaminated land) have effect in relation to a Schedule A business in accordance with their provisions.