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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 and FA98/SCH4/PARA7).

In recognition of this change, the formulae for setting interest rates no longer contain an adjustment for tax. The new formulae are at SI1990/1297 Regulations 3BA and 3BB, inserted by SI1998/3176 Regulation 8.