Which companies may deduct management expenses?

A deduction for management expenses is available for companies with investment business as well as those qualifying as investment companies, plus non-UK resident companies. The inclusion of companies with an investment business is important for companies who hold shares in subsidiaries as well as having their own separate trade.

Expenses of management of the company’s investment business which are referable to an accounting period are allowed as a deduction from the company’s total profits. The expenses are ‘referable’ to that accounting period when they are debited to a company’s accounts in the profit and loss account or income statement, the statement of recognised gains or losses, or statement of changes in equity in accordance with GAAP. See ‘Accounting period to which management expenses relate’ below for more information on this.

What general categories of expenditure will be treated as management expenses?

As a general rule, expenses will be allowable