Withholding tax on payments of interest

Produced by a Tolley Corporation Tax expert

Corporation Tax

Guidance

This guidance note explains the main scenarios where UK companies (other than financial institutions, etc) must withhold tax at source on payments of interest and how this is dealt with in practice. For more general information on the obligation to withhold tax in the UK from interest, royalties, etc, see the Withholding tax guidance note.

Obligation to withhold income tax from certain payments

When UK companies, or partnerships of which a company is a member, make certain types of payment, they are required to deduct income tax (at the basic rate) at source and pay it over to HMRC. In doing so they act as a collector of the UK tax that may be due from the recipient of the related income. The recipient will usually be able to claim relief against its UK or overseas tax liability for the tax suffered at source, as long as they are not based in a tax haven.

Income tax is only deductible from payments of yearly interest with a UK source when paid.

Yearly interest has no

Continue reading

To read the full Guidance note, register for a free trial of Tolley+™

TAKE A FREE TRIAL

Popular Articles

Value Added Tax

Exporting goods ― proof of export

Exporting goods ― proof of exportIn addition to the requirements laid down in the Exporting goods ― overview guidance note, businesses intending to zero-rate exported goods must hold satisfactory evidence that the goods have been delivered to a destination outside of the UK. If satisfactory evidence

15 Dec 2020 14:02 | Produced by Tolley Read more

Value Added Tax

UK VAT invoice requirements

UK VAT invoice requirementsThis guidance note provides details of the information that must be shown on a valid tax invoice. Businesses supplying goods and services that are liable to the standard or reduced rate of VAT are required to issue a tax invoice to another VAT registered person.If the

14 Jul 2020 13:46 | Produced by Tolley Read more

Employment Tax

Parking provision and expenses

Parking provision and expensesCar parking facilities at or near to the employee’s workplaceThere is an exemption from tax and NIC where an employer provides parking, or pays for or reimburses an employee for the costs associated with car parking at or near the place of work; there are no reporting

14 Jul 2020 11:09 | Produced by Tolley Read more

��Ƶ