§ Dawn Primarolo
A provision made in the accounts of a company carrying on a trade will be allowable for tax purposes ifthe provision is in respect of allowable revenue expenditurethe making of the provision accords with UK generally accepted accounting practicethe timing of the expenditure in question is not affected by any specific tax rulethe provision is sufficiently accurate.
Capital allowances, by contrast, give relief for capital expenditure. The tax treatment of provisions, which, as the hon. Member will know, is affected by recent judicial decisions, therefore has no effect on the availability of capital allowances. The Inland Revenue continues to monitor developments in the law in this area.