Question:
Can you have corporation tax relief on accrued HMRC interest, or does it have to be physically paid?
Arthur Weller replies:
Interest is charged on overdue corporation tax and allowed on overpaid corporation tax. The interest is brought into account as non-trading interest under the loan relationships provisions in computing profits chargeable to corporation tax. See HMRC’s Company Taxation manual at CTM92190. As such, it is usually allowable when accrued ( see here).
