ATED deductibility

We have been debating in our office whether the annual tax on enveloped dwellings (ATED) might be an allowable deduction for corporation tax purposes. We can find no evidence that the ATED is a corporation tax charge.

On the basis that the tax treatment of expenditure generally follows the accounts treatment subject to any specific rules to the contrary we are curious about whether it might be allowed as a tax deduction.

Given that certain other taxes are deductible for example employers’ National Insurance contributions business rates and insurance premium tax we can see no compelling reason for the ATED to be intrinsically disallowable.

We thought that it would be interesting to seek HMRC’s view. A letter from an inspector stated that although he can find no reference to the ATED other than to how it is calculated and paid he has been...