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Legal Fees- Allowable for Corporation Tax

Legal Fees- Allowable for Corporation Tax

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Please can someone point me in the right direction to find clarification on what types of legal and professional fees are allowable for Corporation Tax.

One expense is for legal fees in relation to a license to assign at the end of a lease.

The other is legal fees in relation to registering a charity as a non profit organisation.

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By thisistibi
14th Feb 2012 16:50

Legal fees regarding rights over a lease are probably capital in nature, unless you are trading in properties, so probably not allowable.

Since a charity is not normally subject to corporation tax, the question of deductibility is not in point.

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Replying to SteLacca:
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By OLF88
14th Feb 2012 17:00

Please can you point me somewhere to back this up.

 

Regarding the lease, I understand that a short term lease which this had been, are usually allowable, therefore would it be fair to assume fees relating to the end of the lease are also allowable.

 

The second issue is more that if it is necessary routine for the nature of the business it is allowable. Which registering itself as a non profit organisation would be.

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By thisistibi
14th Feb 2012 20:41

@OLF88

If you want paid advice, you should go to an accountant!

The only legal fees relating to a lease which are allowable, are by concession, renewal of a short lease.  Costs of assigning a lease are not allowable.

Who was the charity registered with?  Charities Commission?  HMRC?  I agree there might be grounds to allow it, but it's not a straightforward answer without the full facts.

 

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By mickey09
15th Feb 2012 10:49

Business Income Manual

Here is a link to HMRC's Business Income Manual concerning professional fees, http://www.hmrc.gov.uk/manuals/bimmanual/BIM46400.htm

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