Commentary

B2.320 Ex gratia and charitable payments

Business tax
Business tax | Commentary

B2.320 Ex gratia and charitable payments

Business tax | Commentary

B2.320 Ex gratia and charitable payments

It is not essential that the expenditure in question should have been incurred under contract. It is sufficient that the expenditure is incurred as a matter of commercial expediency and to facilitate the carrying on of the business as explained in B2.3071. A variety of examples of this may be cited. A gratuity paid voluntarily to a retiring employee has been held to be deductible on the ground that the employee expected to receive a gratuity on retirement and, therefore, was likely to serve for a somewhat smaller salary than would otherwise be payable2.

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