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what is the tax rate on interests?

goldringgoldring Feels At HomeRegistered Posts: 45
What is the tax rate on intersets that a business has to use?#
the bank statement only shows the net interest, and said they use 20%
company accountant instructed us to use 21%,

which should really be used?

Comments

  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,071
    What interest?

    If it is income tax deducted on bank interest receivable, then they will deduct 20% at source.

    Bank interest should be paid to a Limited company gross.

    21% is the old rate of corporation tax to 31st March 2011 and has nothing to do with bank interest as applied by the bank (though if bank interest was paid gross, the company would owe 21% of it as CT)
  • goldringgoldring Feels At Home Registered Posts: 45
    Monsoon wrote: »
    What interest?

    If it is income tax deducted on bank interest receivable, then they will deduct 20% at source.

    Bank interest should be paid to a Limited company gross.

    21% is the old rate of corporation tax to 31st March 2011 and has nothing to do with bank interest as applied by the bank (though if bank interest was paid gross, the company would owe 21% of it as CT)

    It's bank interest receivalbe of the money deposit of our organisation.
    so how the interest should be accounted then? Our currently treatement of it is that work out how much the 21% of the gross interest is and then debited the coporation tax account, this way it does not need to worry about the CT side on interest received, then.
    the other thing is that we are not a limited company, (you can not find it in the companies house), as i'm told by my manager, but not a charity either, it's kind of a sports/interests club, you see,
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