AI Summary of 787AD. Allowance to employer.
This section clarifies the definitions pertinent to chargeable periods, specifying that a 'chargeable period' encompasses both the chargeable period and its basis period. For employers assessing income tax under Schedule D, the basis period relates to the specific timeframe used for calculating profits or gains subject to taxation.
Employers may deduct contributions made to a Personal Equity Plan (PEPP) of employees as an allowable expense within the chargeable period. However, such deductions are limited to contributions within the prescribed employer limit, and cannot exceed the total contributions made by the employer towards PEPP products related to assessable profits.
787AD. Allowance to employer.
(1) For the purposes of this section -
(a) a reference to a 'chargeable period' shall be construed as a reference to a 'chargeable period or its basis period' (within the meaning of section 321), and
(b) in relation to an employer whose chargeable period is a year of assessment, 'basis period' means the period on the profits or gains of which income tax for that year of assessment is to be finally computed for the purposes of Case I or II of Schedule D in respect of the trade, profession or vocation of the employer.
(2) Subject to subsections (2A) and (3), any sum paid by an employer by way of contribution to a PEPP of an employee shall for the purposes of Case I or II of Schedule D and of sections 83 and 707(4) be allowed to be deducted as an expense, or expense of management, incurred in the chargeable period in which the sum is paid but no other sum shall for those purposes be allowed to be deducted as an expense, or expense of management, in respect of the making, or any provision for the making, of any contributions under the PEPP contract.