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HMRC internal manual

Company Taxation Manual

CTSA: Loans to participators: Late payment interest

TMA70/S87A (1)

Interest is charged on any outstanding ICTA88/S419 liability from the due date until the earlier of:

  • payment of the tax (Section 87A(1)), and
  • the date that the loan or part of it is repaid, released or written off (TMA70/S109 (3A)).

For the purpose of applying the second rule, any tax that is unpaid at the date on which a repayment etc. occurs is assumed to be, as far as possible, Section 419 tax, rather than CT or tax under ICTA88/S747.

Even when relief is deferred under Section 419 (4A) interest is only calculated until the date of repayment, release or set-off, see CTM61605 onwards. In such cases you should use form CT250(P) to tell the accounts office the date(s) to which interest should be calculated.

To find out more on late payment interest see the On-line Company Tax Manual (COM) “ICTA88/S419 (4) - Late Payment Interest” in the “Other Reliefs” section in the Claims/Reliefs business area.