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The common types of allowable and unallowable management expenses for corporation tax purposes are set out in the Management expenses guidance note. Allowable management expenses are set against total taxable profits in the accounting period in which they are incurred. This set off is automatic (and compulsory) and is against total profits before deducting qualifying charitable donations and before any other loss relief claim.

Excess management expenses arise to the extent that the management expenses in an accounting period exceed the total profits for that period.

Where excess management expenses arise, they can either be:

1. •

   carried forward and offset against future total profits, or

2. •

   surrendered to another group company. This applies to excess management expenses carried forward from earlier periods provided they arose on or after 1 April 2017

Excess management expenses cannot be carried back to an earlier period.

This guidance note provides details on the relief available for excess management expenses. For more general information on these expenses, please refer to the Management expenses guidance note.

There are various anti-avoidance provisions