Corp Tax on interest

noodles

Company has bought forward losses
Company made losses in year
Company received interest during year

Am I correct in saying that the losses b/f can not be put against the Interest and therefore the customer has to pay CT on his interest?

B/f losses can only be used against profits on same trade .......

Thanks for any replies

Bluewednesday

If the company made losses during the year (as you have stated) those can be set against the interest and then add what's left to the brought forward losses which can be set against future trade profits

noodles

I need to look at this again then as my software keeps showing corporation tax on the interest element. I am using taxcalc. I rang a help line for tax advice and they said that it is chargable to corp tax - oh what fun ....

Bluewednesday

Have you definitely made losses during the year? Unfortunately I use PTP so can't advise you on taxcalc but I'm sure there are plenty on the forum that use it.

If your software is set out like a CT600 then you just need to put the loss that you can use against the interest in box 30 on page 2 of the short form. The only way you can't offset the loss against the interest is if there aren't enough losses in the current year - as you've stated you cannot use brought forward losses against interest.

I also include a loss memo as an attachment to make it absolutely clear, not that I think they ever look at it!

noodles

unless the heat is getting to me, I am sure it was a loss in year but will double check tomorrow. It must be something I am doing wrong on the CT 600. First week of using taxcalc so must be my error! I will start tomorrow with a cup of tea and a revisit of this tax return before I do anything else. Thanks for you posts.

noodles

Yes it was a silly user error, had not entered it into box 30. I spent silly hours yesterday looking at this and getting very frustrated. All sorted now. Thanks