Interest on CT refund

Interest on CT refund

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Am I right that this should be disallowed for tax, that the income should be excluded from the calculation?
Sam

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By User deleted
30th Oct 2008 16:40

For Clarity
Interest on early payment of CT is taxable:

http://www.hmrc.gov.uk/manuals/ctmanual/CTM92320.htm


Interest on late payment of CT is allowable:

http://www.hmrc.gov.uk/manuals/ctmanual/ctm92190.htm

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By pawncob
30th Oct 2008 12:58

It's alll mine
Interest charged is not deductible. Interest received is not chargeable.

Sorry, I misread the question.
(IT not CT)

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By User deleted
30th Oct 2008 14:32

Definately taxable
I believe it was changed as companies who pay by installments were getting charged interest if there estimates turned out to be too low, but werent getting relief for it. Therefore, HMRC changed it to allow CT interest charged on late payment to be tax deductible, but also changed CT interest received to taxable.

I was of the understanding though that PAYE interest has always been taxable/allowable, but I may be wrong.

Interest received/paid on SA income tax liablities is definately not allowable or taxable.

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By cmclaren1978
30th Oct 2008 13:31

I agree
I have checked this out before, and it is definitely taxable (and similarly interest paid is deductible).

I think that PAYE/VAT interest is not taxable though from memory - someone might be able to clarify that.

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Euan's picture
By Euan MacLennan
30th Oct 2008 13:26

No
Interest charged on late payment of CT is deductible from taxable profits and interest received on early payment of CT or on CT refunds is taxable as income.

Geoffrey is right and I think that Simon is wrong.

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By geoffwolf
30th Oct 2008 13:01

no
you deduct it from case i profit but it is case 3 income. Therefore tax is effectively paid on it.

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