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CT61 - when is interest treated as 'paid'?

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We have a new client at work that have received loans historically from each of the company Directors.  Interest is charged on these at a market rate but rather than being physically paid to the Directors, it is credited to their DLAs.  They've not previously completed CT61's but I'm not sure whether they should have!

All of the HMRC guidance I can see on this mentions that the CT61 is to be completed when interest is PAID.  Does this mean physically or when made available to the Directors (i.e. when credited to their loans)?  It doesn't seem to tally up that the company receive a CT deduction for the interest paid, but no-one is actually paying tax on the interest received.  Should the interest be added back in the tax comp?  If a dividend was credited to the DLA, for instance, that's generally treated as paid with tax payable on it.  

If it is only when the money is physically paid out to the Director, how is that determined?  In a simple example, if the Director loaned the company £100k @ 5%.  He has a DLA of £105k at the end of year 1.  He then withdraws £10k - is this treated as £5k capital and £5k interest...no doubt he'd argue it was a repayment of the capital, so no interest element PAID and no tax therefore.

Any assistance would be appreciated.

Replies (56)

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By Paul Crowley
18th Jun 2020 16:56

CT61 required
Director entering the interest on SA return?

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Psycho
By Wilson Philips
18th Jun 2020 16:59

Simple. The general rule applies -when something is credited to DLA then, absent any provision that expressly prevents the director from drawing against the DLA, it will be treated as paid at that time.

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By Wanderer
18th Jun 2020 17:11

If accrued, no CT61.
If paid or credited to DLA then CT61.

Ignore your CT deduction considerations, these are a red herring.

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By pbolton
18th Jun 2020 17:23

Thanks for the responses so far guys. I'm pleased that your views seem to be in line with mine and that a CT61 looks to be required. It's that word 'paid' that threw me.
Currently, no CT61 or entries on the SA returns either as far as I'm aware so both of these would need updating moving forward.

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By pbolton
25th Jun 2020 12:01

Just following up on this - I spoke with the CT61 dept at HMRC yesterday and was told that it's only at the point the interest is physically paid to a Director (NOT when credited to a loan account/accrued for) that the CT61 has to be prepared.

When I asked how on earth you work out whether a withdrawal from the DLA would be capital or interest (or a mixture of both) the lady at HMRC didn't know and said that was probably something for 'us' (accountants) to decide!

Interesting, as this could potentially shift the CT61 issues much further down the line if withdrawals aren't made.

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Replying to pbolton:
Hallerud at Easter
By DJKL
25th Jun 2020 12:37

With the greatest respect to the CT61 Dept at HMRC, could the answer you got be down to the fact that HMRC staff seem to be particularly weak understanding double entry bookkeeping and accountancy, especially standards that compel such accruals.

I had a spat with HMRC a number of years ago re accrued dividends on preference shares which required to be Debited to P & L and treated as interest under FRS25 I had the Cr going to an account for accrued preference dividends, this I had in the stat accounts with a specific note explaining both the need to accrue, the treatment and the movement year to year.

HMRC tried to argue that the accrual was sufficient for dividends to have been "paid", I stuck to the argument that they were not paid until either physically paid or credited to the director's loan account. There was a fairly significant sum involved, about £500k in the provision by the time the question was raised as the pref divs accrual ran at £80k a year. Whilst never needing to go to FT, they eventually acknowledged the point that the dividends had not been paid and accordingly there were no omissions from the individual's tax returns, the entire exchange of letters left me convinced that most of HMRC do not really understand accountancy.

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Replying to DJKL:
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By pbolton
25th Jun 2020 15:06

I did push her on it, almost to the point of trying to convince her that HMRC were missing out on tax here if she was correct. I even gave her different examples of accruing or crediting the loan account (so the money is, effectively there to take whenever he/she so desires). On both occasions she was insistent it was only when the money is physically paid in cold, hard, cash to the Director. If I'm honest, it still doesn't feel completely right but short of speaking to another person in the CT61 dept I can do no more.

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Replying to pbolton:
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By Justin Bryant
25th Jun 2020 15:14

Although like PNL HMRC are wrong most the time (ignoring formal set-off arrangements) they are correct this time and the usual suspects here do not know what they are talking about as usual.

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Replying to DJKL:
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By Homeworker
27th Jul 2020 15:00

DJKL wrote:

....the entire exchange of letters left me convinced that most of HMRC do not really understand accountancy.


Well I certainly didn't when I was in HMRC in the 70s, although I did not quite reach the heady heights of Inspector grade! I learned far more in the first year in a firm of accountants than I ever did in HMRC.
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By SteveHa
25th Jun 2020 12:16

IIRC, PNL had quite strong views on this that interest is not paid unless it is actually paid. i.e. crediting to the DLA was not sufficient to constitute payment.

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By Justin Bryant
25th Jun 2020 12:53

That does not surprise me as you wouldn't pay CT61 tax for accruals of interest payable to an offshore company lender, so why should accruals of interest to UK human lenders be different (the fact that the lender is a s/h/director is neither here no there)?
https://webarchive.nationalarchives.gov.uk/20140206151058/http:/www.hmrc...

It certainly made no difference in the very old days of ACT as far as I can remember.

Clearly, in the absence of the need for case law payment timing deeming rules, the payment will be whatever the parties agree the payment is for (and reflected thus in their respective ledgers).

I see PNL agrees with me (which is unusual) here: https://www.accountingweb.co.uk/any-answers/private-loan-should-interest...
https://www.accountingweb.co.uk/any-answers/when-a-company-pays-interest...

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Replying to Justin Bryant:
By Ruddles
25th Jun 2020 14:07

There is a difference between accruing interest and crediting it to a current DLA. It is common ground that a credit to a current account to which the owner has unfettered access constitutes payment (as in the bank paying interest into a deposit account, as in credit of a dividend being treated as payment of that dividend).

If on the other hand the director has lent money to the company, and the loan is not repayable on demand, any interest added to the loan will not be treated as paid at that point.

PNL wasn’t always right, you know.

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Replying to Ruddles:
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By Justin Bryant
25th Jun 2020 15:03

What is your case law or legislative justification for that specifically re this CT61 interest payment point (dividend etc. treatment is not determinative)? (I will not argue with you that PNL was mostly wrong - I told her that myself umpteen times as you should know and you are mostly wrong too incidentally as you seemed to agree with her most the time.)

I don't see why there should be a distinction between specific and general creditors re this point (regardless of whether they are directors and/or shareholders).

I suspect these comments from the link below are correct, so as long as the company agrees with the director there is no set-off of the "interest" funds then no CT61 payment is needed and that is a trivial thing to sort out, so in practice (for the well advised) no CT61 payment is needed unless actually paid.

"2.1 Payment

The obligation to deduct income tax only arises either where interest is paid or is treated as paid. It follows that there is no general obligation to deduct tax in respect of interest that has accrued but which has not actually been paid.

At its simplest, a payment of interest is treated as paid where one person makes an unconditional transfer of cash to another person in order to extinguish an obligation to pay interest. The crediting of interest to the bank account of a depositor will also constitute payment of interest. Payment can also be made by way of book entry but it is important that this does more than simply record the fact that interest has accrued and is due and payable. For example, where interest is simply capitalised by adding an amount referable to interest fallen due to the amount of principal due to a lender then this will not amount to payment. However, where a book entry records the set off of an obligation to pay interest against an obligation owed by a lender to pay an amount to a borrower, then this will probably constitute payment."

https://www.withersworldwide.com/en-gb/insight/uk-withholding-tax-on-int...

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Replying to Justin Bryant:
Psycho
By Wilson Philips
25th Jun 2020 17:29

You made the point previously that people should stick to discussing topics that they know about. You would do well to follow your own advice.

You don't seem to understand the difference between a credit to a current loan account and an accrual. It's got nothing to do with 'general' or 'specific' creditors - an accrual can be specific or general.

You also don't seem to understand the concept of funds being at the ready disposal of the lender. You do realise, I hope, that there is a distinction between a loan principal and a fluctuating balance that the individual can draw upon immediately.

The key words above are "treated as paid"

Accepting that HMRC are often wrong, they nevertheless take the view (in the context of wages etc) that Where an amount is credited to the director’s loan account, by way of wages or salary, and the director is free to draw on that amount at that date, then the date of the credit is the date the payment is treated as made

With specific regard to interest Interest ‘arises’ when it is received or made available to the recipient. Interest has been made available if it is credited to an account on which the account holder is free to draw.

Now I know that you’ll say HMRC are wrong here because they are at odds with your own opinion. Which is just that, an opinion - where is the legislation or case law to support it?

Following your logic, wages (or dividends) credited to a current account would never be taxed until actually drawn down - which is clearly nonsense.

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Replying to Wilson Philips:
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By Dib
25th Jun 2020 16:49

Have we actually determined the nature of the loans and the interest payable, i.e., is it annual interest which should be paid under deduction of tax or is it not annual interest?

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Replying to Dib:
Psycho
By Wilson Philips
25th Jun 2020 17:04

No idea, but that wasn’t the issue.

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Replying to Justin Bryant:
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By whitevanman
25th Jun 2020 23:42

Not really surprising that, yet again, you cite something in support of your opinion which in fact supports the opposite view.
The case of Garforth v Newsmith Stainless (52TC522) confirms that credit to an account on which a person is free to draw constitutes "payment". So the answer which others have given is perfectly correct (on the facts provided) whilst your own response is typically wrong. But do not feel that anyone is judging you and if this response should cause you to be upset, please understand that was not my intention and I will bend over my well worn desk and prepare for suitable chastisement from the moderators (probably enjoy it but don't tell them).

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Replying to Justin Bryant:
By Ruddles
26th Jun 2020 10:56

Justin Bryant wrote:
What is your case law or legislative justification for that specifically re this CT61 interest payment point (dividend etc. treatment is not determinative)?

See whitevanman's reference. The fact that it was a case dealing with salary/bonus, and not interest, is neither here nor there. The decision confirmed the principle that a credit to freely-accessible current account, regardless of the nature of the credit, is treated as payment of the item in question.

(And I think you will find that Portia and I were actually in agreement on this whole issue.)

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Replying to Ruddles:
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By Justin Bryant
26th Jul 2020 16:59

As usual you are completely wrong. See:
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim42310
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim42320
https://www.scotcourts.gov.uk/search-judgments/judgment?id=3e5a86a6-8980...

Thus, a general interest provision/accrual would not be a payment per my above comments.

Yes; I know PNL & you mostly agreed on things, which says everything.

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Replying to Justin Bryant:
By Ruddles
26th Jul 2020 18:56

As usual the point has gone straight over your head. The ‘nature of the credit’ was a reference to salary v dividend v bonus etc. The point was made earlier that it doesn’t matter whether a general or a specific provision is made - what is important is whether or not it is a credit to the loan account. The point confirmed by Messrs Good and Mooney, confirming the position held by me and PNL, and confirming that you (and therefore HMRC - as regards the OP’s experience) are wrong - as usual.

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Replying to Ruddles:
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By Justin Bryant
27th Jul 2020 10:03

It may be that you agree with me. It may be that you don't (I don't really know what your point is any more). Regardless, I know I am 100% correct (as are HMRC) that a general interest accrual is not a "payment" re CT61s (unless/until a court case determines otherwise at least). That's obviously all that matters here i.e. it is pretty easy to avoid the argument in the 1st place isn't it?

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Replying to Justin Bryant:
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By Tax Dragon
27th Jul 2020 10:32

I suspect you and Ruddles are both right, just talking at cross purposes. (That happens a lot with you, because you don't read what other people write.)

In summary: accruing for (the) interest is not paying it; crediting it to the director's account is. In this case, it was credited, therefore paid. Simple.

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Replying to Tax Dragon:
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By Justin Bryant
27th Jul 2020 10:36

Per the case in my above comment, it is debatable whether a credit to the DLA is payment for these purposes and my rather obvious point all along has been that it is pretty easy (for anyone with half a brain cell) to avoid the argument in the 1st place.

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Replying to Justin Bryant:
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By Tax Dragon
27th Jul 2020 10:41

Well, what has happened has happened and now the argument has to be had.

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Replying to Justin Bryant:
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By Tax Dragon
27th Jul 2020 10:46

Justin Bryant wrote:

Per the case in my above comment...

I've read as far as para6: "I think that it is obvious that the employee had complete control... and had immediate access to its cash" and that payment had been made.

I'm thinking I don't have time to read through to whatever sentence you think supports your argument. And I'd probably not read it that way anyway, so would miss it. Could you help me out a bit? How does this case help (you)?

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Replying to Tax Dragon:
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By Justin Bryant
27th Jul 2020 11:09

It is debatable (for non-PAYE cases) per para 33:
https://www.scotcourts.gov.uk/search-judgments/judgment?id=3e5a86a6-8980...

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Replying to Justin Bryant:
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By Tax Dragon
27th Jul 2020 11:15

Thank you.

I can see it has been debated. It looks to me as if a view has been taken (that the debate has been decided). Whether that decision is binding, I don't know. But I suggest an alternative view is unlikely to emerge, absent any strong reason for that to happen.

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Replying to Tax Dragon:
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By Justin Bryant
27th Jul 2020 11:23

If you read it properly you will see that the view has been confirmed re PAYE only. Thus the contrary view re CT61s is debatable as I say. That's all rather besides my above point i.e. you would be dumb to do a DLA credit in the 1st place rather than a general interest accrual.

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Replying to Tax Dragon:
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By Paul Crowley
27th Jul 2020 11:32

Agree
Accrue for the specific sum, not a payment
Lost in the mire of numerous entries on directors loan, whether debit or credit, it is paid.

All other issues raised irrelevant

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Replying to Justin Bryant:
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By cathygrimmer
27th Jul 2020 16:22

But surely we're not talking about an accrual here but a credit to the DLA. I'm not an accountant but if interest had been accrued in the accounts, crediting it to the DLA would give a corresponding reduction in the accrued amount, wouldn't it - i.e. a recognition that it isn't an accrual any more, it has been 'paid'? And if you didn't treat a credit to the DLA as 'paid' when would you recognise payment? How would you determine when a transfer of funds reducing the DLA credit represented a payment of interest rather than a payment of a dividend or salary or expenses reimbursed? I really can't see how a credit to the DLA isn't a 'payment' of interest. Clearly it can be avoided by not crediting it to the DLA (which I think is what you are saying) but that wasn't the question (and, unless interest when it is paid is paid by bank transfer on that day rather than crediting it to the DLA, you still have the issue of identifying when a drawing on the DLA constitutes payment).

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Replying to Justin Bryant:
By Ruddles
27th Jul 2020 15:26

Let me remind you of the point, which isn't that hard to find by scrolling to the top of the page. Whether or not it was a dumb thing to do, the OP's client credited interest to the DLA. The question is whether said credit should be taken as payment of interest. HMRC said no, and you said that HMRC are correct. You seem to be in a minority of one (other than HMRC) but feel free to keep arguing the point.

[moderated]

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Replying to Ruddles:
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By Tax Dragon
27th Jul 2020 15:37

I think Justin's point is merely that the Court found it worthwhile to consider the question of whether a credit to the director's account counted as payment, therefore there must be a valid question over whether crediting the account is payment. If you were to seek to defend the client's position, you might try arguing the case. You (obviously) won't win, but maybe you could mitigate penalties.

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Replying to Tax Dragon:
By Ruddles
27th Jul 2020 15:48

And my point is that the Courts (deliberate plural) having considered the question have all decided that a credit to a current loan account with unrestricted access to the funds is payment. If Justin wants to waste his time and his client's money in trying to argue otherwise in Court, I'm not going to try and convince him of the folly of doing so.

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Replying to Ruddles:
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By Tax Dragon
27th Jul 2020 16:01

Good point well made.

(At no point have I been in disagreement with you. But if the question has come up multiple times [has it seriously?! what's to discuss?!], it must be a good question, and Justin will take solace from your deliberate plural.)

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Replying to Tax Dragon:
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By whitevanman
27th Jul 2020 20:40

I would never pretend to fully understand Justin but in this case, as I read his comments, his position seems to be that, whilst credit to the DLA counts as payment for PAYE purposes, it has not been decided that crediting the DLA counts as payment for other purposes such as paying interest.

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Replying to whitevanman:
By Ruddles
27th Jul 2020 21:23

That does appear to be the case, despite the fact that the case cited in supporting the decision had nothing to do with PAYE, and which commented more generally on the effect of a credit to a loan account. I could cite other (non-PAYE) cases where the same conclusion has been reached - I am surprised that Justin seems to be unaware of them (although I suppose that he would want to reference only those cases that support his view. The irony being that in many instances they do exactly the opposite.)

It is also notable that his stance changed somewhat - from categorically stating that HMRC are correct to claiming that it is debatable - which of course everything is if you happen to have a view that is contrary to that of everyone else..

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Replying to Ruddles:
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By whitevanman
27th Jul 2020 23:09

Yes. Pity he didn't follow the trail of cases referred to in the Aberdeen case, through DTE and onto McNiven where they very definitely did discuss what payment means in relation to interest. The credit to an account was not directly in point but the comments about what payment means would certainly cover the point.
Still, debatable if you are that way inclined.

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Replying to whitevanman:
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By Tax Dragon
28th Jul 2020 06:56

Blimey I'm not typing all that out again....

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Replying to whitevanman:
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By Tax Dragon
28th Jul 2020 06:53

whitevanman wrote:

Still, debatable if you are that way inclined.

There is a little bit either of Justinism or hypocrisy, possibly both, in that remark. True, the answer to the debate is obvious (as per para6, which I twice referenced above). But I've had a few discussions in here with you in which you proposed some (to my mind) fairly arm-wavy(*) arguments on the explicit basis that you would act in the client's interest.

(*) I'm trying and failing to find an adjective that could not possibly cause offence. I've already crossed out "questionable", "creative" and others. I'm simply not clever enough to think of the right word (or maybe I did and then crossed it out!) Please read it as if I had used one that didn't offend you.

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Replying to Tax Dragon:
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By whitevanman
28th Jul 2020 12:48

Thanks for the consideration. I take no exception to comments made by those who have something, useful, to say. I would always accept that there are grey areas in the law (tax or otherwise). In case it didn't come across, I agree with the majority here that the DLA credit is "payment" and I don't really think there is any doubt simply because we are considering a payment of interest rather than income subject to PAYE. I think Justin hangs his "debateable" comment on the fact that the decision in "Aberdeen" frequently refers to the purposes of PAYE. IMO, that is neither surprising nor untypical. Nor does it imply that the same view would not apply to interest etc. The court were considering the application of PAYE and only that issue and such comments makes that abundantly clear (should it be necessary). The fact remains however, that when considering a word like payment, there would have to be an exceptional reason (probably within the statute itself) to interpret it as having a different meaning in relation to one type of payment, than it has for another (others). This is (IMO) confirmed by comments in the McNiven case.
I don't know if that is where you detect some "arm-waviness"? I could have said a lot more about it but honestly did not see the point!
You have indeed commented a couple of times on my "arm-wavy" comments. Cannot bring to mind a specific example but no doubt you will tell me (again) next time.
I think I have understood, in the past, what you were getting at.
If it helps, I would say that, before moving outside, I did work for HMRC for a number of years and may sometimes comment based both on the legislation / case law and my understanding / recollection of how they applied it in practice (and why). Sadly this is something that is, increasingly, not understood by their own staff it seems.

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Replying to whitevanman:
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By Tax Dragon
28th Jul 2020 13:24

I didn't mean I thought you were waving arms this time. I meant you had (in previous threads) set about constructing arguments(*) that might not stand up if the big bad wolf huffed and puffed in their direction.

(*) I was going to say "a bit like Justin's here", except Justin hasn't constructed an argument, merely asserted arguability - now that really is arm-wavy.

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Replying to Ruddles:
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By Justin Bryant
28th Jul 2020 08:34

I just feel sorry for any of your clients, who end up having to pay CT61 penalties/interest (should HMRC wrongly (against their guidance) levy such charges in the 1st palce) coz you vehemently disagree with HMRC's view that credits are not payment for these purposes and even if that was not HMRC's view you are not prepared to argue that eminently arguable point in their defence!

But then again I assume in such a case you will say one thing and do another!

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Replying to Justin Bryant:
By Ruddles
28th Jul 2020 09:25

Please point me to the written HMRC guidance which says that a credit to DLA is not payment for CT61 interest purposes.

I would not be relying on the words of an Internet post where it is claimed that an Officer gave such guidance over the phone - as we all know, they are frequently wrong.

Until such time that HMRC provide written guidance, or a direct written ruling, I would prefer to advise my clients to act in accordance with the tax experts and case law.

If I had a client who had failed to deduct interest and was challenged then of course I would argue their case- I would not, though, be confident of success.

But your comment appears to be a rather pathetic attempt to divert attention from your own shortcomings.

We know that salary/bonus credited to DLA is treated as paid for tax purposes (whether PAYE or not). We know that dividends credited to DLA are treated as paid for tax purposes. In light of case law, I really would like to know what your argument would be in claiming that interest credited to DLA should be treated any differently.

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Replying to Ruddles:
Psycho
By Wilson Philips
28th Jul 2020 09:46

Spot on.

The verbal advice, if recorded, given to the OP might assist in arguing against any penalties and interest if the treatment is subsequently challenged. Other than that, I wouldn’t place any value in it. In particular, by the sound of it, the “lady at HMRC” didn’t sound if she was particularly high-grade - I suspect that the staff in the CT61 department are little more than processors and I doubt very much that they would have the required level of technical knowledge to answer such a question correctly.

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Replying to Ruddles:
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By Justin Bryant
28th Jul 2020 14:29

I must confess I don't bother reading what you say anymore as it's garbage usually and so a waste of my time, except to say someone above was saying an accounts credit was not a payment re CT61s as far as HMRC were concerned and that only actual physical interest payments mattered. And in any event the point is arguable as I said (there has been no specific tax case on this specific point as far as I'm aware - probably as HMRC don't bother arguing it in the 1st place).

An example of a recent case concerning the difference between a liability incurred (but not physically paid) and a physical payment liability (referencing relevant tax cases and thus showing the point is eminently arguable) is at para 69 et seq here:

https://www.bailii.org/ew/cases/EWHC/Comm/2020/2024.html

Also, what if the lender is a 100% shareholder & not a director? Why should a shareholder's loan account credit make a difference etc. ?

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Replying to Justin Bryant:
By Ruddles
28th Jul 2020 22:10

So, you don't have any HMRC guidance to point to. Only the secondhand 'advice' given to an anonymous internet forum member by one member of staff who probably wasn't sufficiently qualified to give such advice. If that's the standard of evidence that you rely on when arguing your clients' cases heaven help them.

As for your example - nothing more than a further example of your tendency to reference cases that are of no relevance to the topic in hand.

A shareholder's loan account would be no different (and who said that it would be?) - provided that the shareholder has unfettered access to the funds on demand.

You are entitled to your opinion. It doesn't make you right - bearing in mind especially that you are in a clear minority of 1.

You also know that you’ve lost the argument when you have to resort to insults.

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Replying to Justin Bryant:
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By whitevanman
28th Jul 2020 16:56

Whilst acknowledging that, to some people anything is "arguable" (even eminently so), I have no idea why you consider the AXA case (to which you provided a link) in any way supports you. In particular I consider para 69 et seq to have quite the opposite effect.
In the case we are discussing, the question is, what constitutes "payment". There is judicial support for the view put forward by the majority here, that credit to an account on which the individual etc is free to draw, is "payment". It is the ordinary, everyday, meaning.
In the AXA case, they were considering the meaning of the word "incurred".
The defendants argued that (in effect) a liability had not been "incurred" unless and until it was paid.
The judgement in para 69 et seq confirmed that the word "incurred" should be given its everyday meaning. Hence, actual payment was irrelevant.
In para 70, reference is made to the comments of Millett J in the Ensign Tankers case which, although made in a tax context, were nonetheless said to be of general application as reflecting the ordinary and natural meaning of the word (incurred).
The defendants argument for it to have some special meaning failed. There was nothing in legislation to support the need for some special meaning and the actual agreement between the parties, supported the ordinary, natural, meaning.
There is nothing to support the view that, in the context of interest, "payment" should carry some special meaning. There is certainly nothing in the tax legislation to suggest that some such meaning applies. So, we fall back on the accepted, ordinary, natural meaning which has been ruled upon by the courts (as per the majority view).
As I say, I cannot see the case offers any support for your view, but i (and no doubt others) would be more than happy to hear your, reasoned, view to the contrary.

TD, please let me know if the arms are detected. Thanks.

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Replying to whitevanman:
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By Tax Dragon
28th Jul 2020 17:17

whitevanman wrote:

TD, please let me know if the arms are detected. Thanks.

Too many people seem to be getting up in arms (I know, I know... I often feel just as frustrated with the non-engagement of certain participators... I still don't know what "conditional" means in the context of another thread or two)… but this "payment" thread is going nowhere new and I'm laying down my arms and waving goodbye. That's a hell of a physical feat, I can tell you.

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Replying to whitevanman:
By Ruddles
28th Jul 2020 17:24

Pretty much everything that I was going to say but since Justin is no longer reading my garbage, there was no point.

As you say, the AXA case was concerned with the question as to whether expenditure had been incurred before payment was made. At no time do they appear to have considered the meaning of “payment”.

Example: company pays me interest (via DLA) at £1k per month. Interest is credited annually on 30 June, company’s ARD is 31 December. At 31 December 2019 the company had therefore incurred an interest liability of £6k, provided for in the accounts via an accrual. The interest was then paid to me on 30 June 2020 as part of the £12k credit to my DLA.

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Replying to Justin Bryant:
Psycho
By Wilson Philips
25th Jul 2020 00:03

You need to listen to the latest Giles Mooney/Tim Good presentation.

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