How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask bigduckontax Your Own Question

bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3613
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

I am filling in my company tax return -15. In that

Customer Question

I am filling in my company tax return for 2014-15. In that year I took out a bank loan for £10,000 repayable over 2 years. How do I show the loan, the repayments and the interest in my tax return? I assume that the loan itself is not taxable, and that the interest is tax deductible but the repayments are not.
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. You are correct in your assumptions. The loan is a creditor over one year in your balance sheet on the CT600 and the interest is allowable against Corporation Tax. You merely include the interest as part of the calculation for Box 3 of the short veraion of the return. Exactly the same principle is used if you have to use the long version of the CT600. I do hope that my reply has been of assistance.
Customer: replied 1 year ago.

So neither the original loan nor any of its repayments (except for the interest) need appear in the company tax return?

The reason that I ask is that on my form CT600 there is a box AC28 with the label "Interest receivable and similar income:" and the help text mentions "bank loans or deposits", yet there is no equivalent box for the repayments.

I had thought that maybe the £10,000 loan should appear somewhere as taxable income and the repayments as deductible expenses, but you are saying that these should not appear at all. Is that correct?

Expert:  bigduckontax replied 1 year ago.
That is for interest your company receives, if any, from banks, building societies or other deposit takers. The interest paid is netted out in this entry. Here is the guidance from the CT600 notes: 'Combine all the company's non­trading credits and debits into a single figure of profit or deficit. ' A loan to a company is not income, but is merely posted as a creditor in the balance sheet. When repaid the creditors merely reduce. The interest the company pays is allowable against Corporation Tax liability and, for the CT600, merely included in the expenses incurred. I know this seems utter lunacy, but that is how it works. I never cease to be amazed by the crass stupidity in the way the on line CT600 was designed. In the old paper days I was hard pushed if it took 5 minutes to complete. With the on line version it takes at least half an hour as the accounts require reconstructing in a manner totally removed from normal accounting principles; sigh.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3613
Experience: FCCA FCMA CGMA ACIS
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 1 year ago.

Thank you for your excellent support.

Good luck with the on line CT600! I have seen the advice from another highly regarded expert on Just Answer which was to fudge it!

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Previous | Next >
  • http://ww2.justanswer.co.uk/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.co.uk/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    2333
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.co.uk/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    524
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2845
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.co.uk/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    270
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.co.uk/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.
 
 
 

Related Tax Questions