BIM47115 - Specific deductions: staffing costs: employees seconded to charities

Where an employer makes available the services of an employee to a charity on a temporary basis, the expenditure on the remuneration etc of the employee may still qualify as an allowable trading expense under ICTA88/S86.

ICTA88/S86 applies to secondments that are ‘expressed and intended to be of a temporary nature'. There is no definition of temporary' but in practice a secondment for three years of less should be accepted as temporary' without further enquiry.

Relief is due in respect of expenditure that is attributable to the employment, so that not only the employee's remuneration but also any pension contributions and employer's NIC are deductible, if they continue to be met by the employer during the period of secondment.

Relief is given by treating the employee as though he or she were still providing services to the employer and allowing the expenditure as a trade expense. However, relief is only available ‘to the like extent as if' the person were still providing his services to the employer. If, for any reason, the remuneration of the employee was not wholly an allowable expense before the secondment, it will not become so as a result of it.

‘Charity’ has the same meaning as in ICTA88/S506. The well-known charities will be recognised as such. If there is doubt in a particular case whether a body is a charity, enquiry should be made to HMRC Charities.

Secondments to ‘local enterprise agencies' are covered by ICTA88/S79, see BIM47610.

For employees seconded to certain educational bodies, see BIM47120.