Revenue last minute climbdown on use of provisions
	In a landmark decision the Inland Revenue climbed down and dropped their appeal against two cases involving the use of provisions.
	Up until this decision the Revenue generally regarded a provision for future expenditure as only being tax deductible when that future expenditure is incurred.  In one case a partnership had decided to consolidate several offices in one location with the result that they had expensive leasehold premises which could not easily be re-let.  They claimed a deduction for the future rental costs that would be borne.  In the other case a regional department store made a provision for refurbishing a part of their store.   They intended to carry out the refurbishments in a future period.  In climbing down the Revenue have conceded that tax relief will follow the proper accounting treatment so if the provision is required according to UK generally accepted accounting principles (UK GAAP) it will normally be eligible for tax relief.
	This touches on a wider issue.  For tax purposes, the amount of profit which is taxable must be calculated according UK GAAP unless specific tax rules provide for an alternative treatment.  New accoutning standards have modified the way, and the extent, to which provisions must now be calculated.  With self assessment for individuals and now self assessment for companies it is important that these areas are dealt with correctly and clients should take appropriate professional advice at an early stage.