SolvedCOM53160 | Claims / reliefs: other reliefs: S458 CTA 2010 - late payment interest
From HM Revenue & Customs · COTAX Manual
Late payment interest is chargeable under Section 87A Taxes Management Act (TMA) 1970 on Section 455 (S455) tax paid late from the normal CT due date (see Glossary for more information) of the Accounting Period (AP) in which the loan was made to the earlier of:
the date the tax is paid
the date the loan giving rise to the charge is repaid, released or written off
COTAX does not hold the latter date. When you use function RAMA (Record/Amend Assessment) to enter S458 details on an AP (and you will normally only need to do that for S458 relief deferred under S458(5)), COTAX sets the ‘clerical interest’ indicator (CII) see COM95015 for more information. Setting the CII inhibits COTAX from automatically posting an incorrect interest charge.
In these cases you should give the necessary details to HMRC Payments using form CT250(P), which is an eForm on SEES. See COM53300 for guidance on when to complete the form. HMRC Payments will post the correct interest charge to the record using function RMIC (Record Manual Interest Charge). In the meantime you should not make any repayments; you must wait until you know the final interest charge due to ensure that any overpayment is set off against this charge before repaying the balance.
See GOV.UK Directors Loans section for examples.
Where a company claims relief under Section 458 because a loan has been wholly or partly repaid, released or written-off on or after the due date of the AP in which the loan was made, the relief is deferred under Section 458(5) until the normal due date for the AP in which the repayment, release or write-off takes place. In such cases the interest effective date precedes the time at which you can give the S458 relief.
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