Got some money from IR

[thinkofaname]

I got a little cheque from the Inland Revenue the other day which was nice – I guess because I paid my corporation tax a little early they made an interest payment to me.

Does anyone know if this becomes taxable interest income (just like interest income I get from my ltd company bank account) – or does it stay out of my taxable income calculation???

[Bradley]

Re:Interest

It's non-taxable - enjoy

[4Contractors]

Re: Re:Interest

It's non-taxable - enjoy

Hi Bradley

I thought this interest was paid gross and was treated in the same way as the Limited company bank account interest ie. treated as company profit and taxed accordingly ?

[Bradley]

Re:Interest

I thought this interest was paid gross and was treated in the same way as the Limited company bank account interest ie. treated as company profit and taxed accordingly ?No - used to be but different post self-assessment - or is it the other way round? - no, I'm sure its non-taxable and interest isn't deductible

[ASB]

Re: Re:Interest

IFrom a POV of the accounts it's just part of the turnover and thus underlying profit. With the tax calc it's specifically excluded thus it's not taxed.

In much the same way as late payment the income is an expense but that is also exluded from the tax calc so relief is not obtained.

[Bradley]

Re:Interest

So, exactly what I was saying then ASB?

[ASB]

Re: Re:Interest

Bradley,

Yes, I was just pointing out that it is specificially excluded from the tax calculation (be it credit or debit interest) as that seemed to be what 4C was unsure of.

[fiddleabout]

Re: Re:Interest

That sounds nice Bradley especially as the IR pay a higher rate of interest than Cater Allen

I have always paid mine as soon as the accounts were completed (which with my accountant means within a couple of months of year end) because of the interest rate but assuming you are correct (and I always thought it was taxable) that's even more reason.

Do you happen to know how the tax credit for online PAYE filing is handled? I'd assumed it would be taxed but maybe not???

[Robot]

Controversial !

Per CTSA BK/2Chapter 5.1.2

All interest chargeable on late payments of tax is deductible for corporation tax purposes. And interest receivable on tax paid early and on repayments of tax is taxable. The rates of interest charged under Section 87A TMA 1970 and paid under Section 826 ITCA 1988 have changed to reflect this

[Bradley]

Re:Interest(ing)?

Well done Wilson, I was wondering when you were going to spot that ....