Commentary

B2.429 Employees—payments to employees and agents

Business tax
Business tax | Commentary

B2.429 Employees—payments to employees and agents

Business tax | Commentary

B2.429 Employees—payments to employees and agents

A number of issues can arise in respect of payments to employees and agents. For example, has the payment been made for the purpose of earning profits, or is it the application of profits already earned? This question might arise in the context of performance related fees.

Deductible payments to employees and agents

The following have been held to be deductible:

  1.  

    •     sums payable by instalments, calculated as a percentage of net profits, for the benefit of technical and financial experience1

  2.  

    •     lump sum paid to cancel an onerous commission agency agreement, which was considered

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