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Companies now get tax relief for interest on late paid tax. Does this extend to interest on late paid tax due under section 419, Taxes Act 1988 (loans to participators)? Also do they also now get tax relief on interest on late paid pay-as-you-earn and National Insurance contributions?
As to section 419 tax, this is treated for most tax purposes (including the interest charges) as if it were corporation tax. So it is treated as a non-trading debit on a loan relationship (with the result that the company gets tax relief for it).
Companies now get tax relief for interest on late paid tax. Does this extend to interest on late paid tax due under section 419, Taxes Act 1988 (loans to participators)? Also do they also now get tax relief on interest on late paid pay-as-you-earn and National Insurance contributions?
As to section 419 tax, this is treated for most tax purposes (including the interest charges) as if it were corporation tax. So it is treated as a non-trading debit on a loan relationship (with the result that the company gets tax relief for it).
Interest on PAYE and National Insurance contributions is expressly excluded from being taken into account, by section 203(9), Taxes Act 1988. So there is no tax relief available for it whether the payer is a company or an individual.
David Whiscombe,
Berg Kaprow Lewis,
London N3.
