HMRC Issues Guidance on Deductible Expenses for Corporation Tax

The UK tax authority Tuesday issued guidance on what expenses companies can deduct to reduce how much income is subject to corporation tax payments.

Business expenses, also called revenue expenses, can be fully deducted from a company’s profit if they are incurred “wholly and exclusively” for business purposes and aren’t specifically disallowed by the tax authority, His Majesty’s Revenue and Customs said.

• Costs involving buying, selling or changing capital assets or any other capital expenses do not qualify as a deductible business expense, according to the guidance. Certain other expenses, such as client entertainment costs, also don’t qualify.
• Companies ...