Skip to main content

This is a new service – your feedback will help us to improve it.

Posted Tue, 31 Jan 2023 18:06:28 GMT by Filed_39
I have phoned your HMRC help lines and been advised of the following below verbally, it would be good to double check this with you and at least have something in writing to file with my accounts, which I assume this forum will provide if HMRC staff answer threads. I wish to double check as the description for the boxes used on the SA (self assessment) tax return seem to paint with a broad brush, and just wish to check. My Tax Calculation is correct, so assume as long as that is being calculated correctly - then exactly where amounts are entered on a Return is never going to be exactly prescriptive. 1) Under s393 and s393a (your HS340), the Limited Company for which I am a Director - deducts WHT (Withholding Tax, amounts declared on a CT61 Return and submitted, and the WHT Tax paid to you) from any Qualifying Loan Interest payments the Limited company makes to me personally. This WHT is then claimed as Income Tax Relief on my SA Tax Return by entering the Tax amount in the 'Additional Information' pages - 'Other Tax Reliefs': Box: 'Qualifying Loan Interest Payable in the Year'. The Box title seems vague, unless I had called you I would not have known whether it was the Gross, Net or Tax amount to enter in the box, but as advised you just enter the WHT Tax Deducted amount. I then attach an R185 Certificate of Deduction of Income Tax to the SA Return, no mention of the Gross or Net Amounts are made on the SA Tax Return - as those amounts are not 'Income'. Can i check I understand that this is the correct way to deal with this. 2) I have personal Loans made to my Limited Company, and the Limited company pay me Interest, and as above, when payments are made to me personally, a CT61 Return is submitted and WHT Tax Deducted and paid to you. Again the WHT Tax is later claimed on the SA Return, with the Gross amount entered on Page TR3 'Income' Interest and Dividends from UK banks and building societies', 'Untaxed UK Interest' and the WHT Tax amount claimed by entering this amount in the 'Qualifying Loan Interest' Box (Page Ai 2, see above), this is what I have been advised ... however I want to check that this is correct, I have tested the online return, and that if a Net amount (of the interest) is entered into the 'Taxed UK Interest' box on Page TR3, and the WHT element not entered anywhere, the Tax Calculation works out the Tax Relief due correctly. The WHT Tax Relief being claimed here relates to Personal Loan Interest, and is not related to Qualifying Loan Interest, and so in my mind the Net Amount should go in 'Taxed UK Interest', let the Return Calculate the Tax Relief, and so not other entries need be made. Look forward to your comments.
Posted Mon, 06 Feb 2023 14:07:05 GMT by HMRC Admin 32

Barring any unforseen circumsances, all our calls are recorded and can be retrieved through a Subject Access Requests (SARS) to HMRC, should you wish to do so.  

Further guidance on this facility can be found at:

Make a subject access request to HMRC  

While entering an amount in the wrong box may still result in the tax calculation being identical, the sum will be recorded under wrong income and would impact the accuracy of treasury reports etc, especially if everyone did this. This is why the need to use the correct box is important.

The interest paid by your limited company to you, as shown on CT61, is recorded on page TR3, as taxed interest. Please enter the net interest figure, as the gross figure will be calculated for your.  CT61 will show tax decucted at the basic rate of 20%. It is not related to qualifying loan interest and should not be shown on SA101 Ai2.5.  

Qualifying loan interest is the interest you pay on a loan you have obtained to to buy shares or fund a close company etc. It is not for interest recieved.

Additional information notes

The above advises you can claim tax relief for interest 'payable' on a loan used to buy shares or to fund a close company etc.  

Loans you make to the company, generate interest income for you. This is taxable interest deducted at basic rate, as shown on CT61. It would be entered on TR3 as taxed interest. The WHT figure is deducted at basic rate.

Corporation Tax: return of Income Tax on company payments (CT61)

Thank you.

You must be signed in to post in this forum.