BIM40130 - Specific receipts: compensation and damages: reimbursement of trading expenses
S5 Income Tax (Trading and Other Income) Act 2005, S35 Corporation Tax Act 2009
Compensation that includes reimbursed expenses
Where an amount of compensation, not itself a trading receipt under BIM40110 - BIM40125, includes reimbursement of trading expenses that are admissible as a deduction, you should treat such expenses as diminished to the extent of the reimbursement (see the words of Lord Blackburn in CIR v The Granite City Steamship Co Ltd [1927] 13 TC 1 at page 18). If such diminution is effected in the trader바카라 사이트™s accounts in accordance with GAAP (see BIM31110) by crediting the reimbursement when received, you should normally not object to following that course for tax purposes.