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Dear Tutor,
I am a bit confused regarding employment cost.
Individuals are assessed on the amount of emoluments received in the tax year. The date received is taken as ther earlier of the date when the employee became entitled to the payment or the date when it was actually received by the employee.
But when I dealt with corporate trading income, the anwer was written that no deduction is permitted where earnings are not paid within nine months of the end of the period of account.
So in this case, employe bonus which was already declared but wouldn’t be paid in that accounting period cannot be deductible?
You will not be required to reconcile 2 separate rules of 2 different taxes – you just need to be able to apply the rule that is relevant in each tax, but remember as you state in your 2nd paragraph that the bonus does not have to be paid in the accounting period to be deductible for corporate tax in that period – it simply needs to be paid within 9 months of the accounting period end as corporate tax is usually payable 9 months and 1 day after the end of the accounting period
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