Am I right that this should be disallowed for tax, that the income should be excluded from the calculation?
Sam
Replies (6)
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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:
It's alll mine
Interest charged is not deductible. Interest received is not chargeable.
Sorry, I misread the question.
(IT not CT)
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.
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.
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.
no
you deduct it from case i profit but it is case 3 income. Therefore tax is effectively paid on it.