BIM40651 - Receipts: insurance commission: introduction
Unless the recipient is an employee, commission is assessable under Schedule D Case I, II or Case VI.
Commission is under Schedule D Case I or II if it:
- arises from a trade or profession (ITTOIA/S5 for income tax and CTA2009/S35 for corporation tax),
and
- is a sum which the trader or professional receives or to which he or she becomes entitled (ITTOIA/S8).
SP4/97 paragraphs 11 to 16 set out the circumstances in which commission, cashbacks, discounts and similar inducements should be taken into account as receipts in computing taxable profits from a trade or profession under Schedule D Case I or II. These paragraphs are reproduced at BIM40655.
For further guidance on:
- sums to which the trader becomes entitled, see BIM40660,
- own commission, see BIM40665,
- deductions for commission passed on to customers, see BIM40670,
SP4/97 also covers the taxation of commission under Schedule D Case VI, see BIM80115.
SP4/97 was drawn up in consultation with representative bodies of the accountancy and legal professions and the insurance industry. It replaces SP51/95 on the same subject.
