Employers may contribute to trusts set up to provide benefits
(usually relatively small) to employees who suffer injuries at
work, or to their families. Typically the trust is set up by a
trade union or employers’ organisation in a particular
industry sector and employers contribute on a per employee / per
week basis. As and when an appropriate injury or disability occurs
a contributing employer or the employee may approach the trustees
and ask for payments to be made in accordance with the rules of the
scheme.
An employer’s contribution to a trust set up solely to
provide accident benefits to employees is an allowable deduction in
computing the taxable profits from the employer’s trade.
The timing of the deduction follows the treatment of the
employer’s contribution in its accounts prepared in
accordance with generally accepted accounting practice. It is not
affected by the anti- avoidance legislation in FA03/SCH24.
FA03/SCH24/PARA8 specifies that it does not apply to
deductions in respect of contributions to an accident benefit
scheme. An accident benefit scheme is defined as a ‘scheme
under which benefits may be provided only by reason of a
person’s disablement, or death, caused by an accident
occurring during his service as an employee of the
employer’.
