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HMRC internal manual

Company Taxation Manual

Corporation Tax self-assessment (CTSA): the payment obligation: credit interest and repayment interest are taxable

Credit interest, and repayment interest on repayments for CTSA accounting periods, are taxable.  They should be brought into account as non-trade credits under the loan relationship legislation (FA98/S34, FA98/SCH4/PARA7, and also CTA2009/S479)).

The formulae for setting interest rates do not contain an adjustment for tax.  The formulae are at SI1990/1297 Regulations 3BA and 3BB, inserted by SI1998/3176 Regulation 8.