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bigduckontax, Accountant
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From what date has it been a requirement for a payer to deduct

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From what date has it been a requirement for a payer to deduct 20%tax on interest payments?
The situation is an offshore (Guernsey)company lent money to a UK company.The UK company has not in the past deducted tax from the interest payments because it considered the payments to be capital.It now wishes to addressthe mistake and pay the tax due.Does it matter which company pays the tax and how far back must they go
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question. I cannot tell you how far back this requirement goes, but it was certainly in force in the early 80s and probably earlier. HMRC can go back 20 years at least, but only 20 in Scotland so some company may be in for a big bill.

HMRC Information Sheet SAIM9090 is quite clear on this matter. As the interest stems from a UK source tax at 20% must be deducted despite this being an overseas loan.

It is irrelevant which company pays the tax providing it is paid. The form to use to report the payment is a CT61 which makes provision for payment of the tax which can be done at any HMRC office, any bank and even the Post Office.
bigduckontax, Accountant
Category: Tax
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Expert:  bigduckontax replied 3 years ago.
Thank you for your support.

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