SAIM9380 | Deduction of tax: qualifying private placements: the regulations: creditor certificates: withdrawn and cancelled certificates

The regulations: creditor certificates: withdrawn and cancelled certificates

SAIM9370 explains that the creditor or another person on their behalf must certify that the creditor meets certain conditions. This certificate must then be supplied to the debtor company.

Withdrawn certificates

Regulation 6 requires that as soon as practicable after the certifier becomes aware that the creditor no longer meets the conditions set out in Regulation 5, they must notify the debtor that the certificate is no longer valid. This is a withdrawn certificate. The certificate is no longer valid from the day after notification is received by the debtor, the security ceases to be a relevant security and the exemption will not then apply.

Cancelled certificates

Regulation 7 allows an officer of HMRC to require the relevant debtor to produce the certificate within a specified period (normally 28 days). If the certificate is not produced or if the officer has a reasonable belief that the certificate is inaccurate, they can determine that the certificate should have no effect. This is a cancelled certificate. Interest must then be paid under deduction of tax from the date the debtor receives notification of the cancellation.