Restriction on deduction under general principles

A payment that is genuinely made on account of redundancy will normally be allowable as part of the staff costs of a business. Complications can arise, though, especially if the payment is made in connection with the cessation of trade (see ¶707-390). It will also be necessary, whether or not there is a business cessation, to demonstrate that the payment is not capital in nature (see ¶207-500ff).

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