REV BN 16: Contributions to Urban Regeneration Companies
Who is likely to be affected?
1. Businesses who make contributions towards the running costs of Urban Regeneration Companies (URCs).
General description of the measure
2. Businesses will be able to treat contributions towards the running costs of a URC as a deductible expense when computing their business profits.
Operative date
3. The relief is available for contributions made on or after 1 April 2003.
Current law and proposed revisions
4. Section 74 of the Income and Corporation Taxes Act 1988 (ICTA) provides the general rules concerning allowable deductions for the purposes of computing business profits. The general scheme is that businesses are entitled (with certain exceptions) to deduct expenditure which is revenue in nature, not capital, and incurred wholly and exclusively for business purposes.
5. New provisions will ensure that a business has a right to treat a contribution towards the running costs of a URC as a deductible revenue expense in those instances that would not normally qualify for deduction under Section 74 ICTA.
Further advice
6. If you have any questions about this change, please contact the Public Enquiry Unit on 020 7438 6420 to 6425.
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