Corporation Tax Act 2009 section 500

Exclusion of interest where failure to make return

Section 500 prevents a registered society from obtaining a tax deduction for interest paid during an accounting period if it fails to submit a required return on time.

• Registered societies are required to make returns of interest paid without deduction of tax under section 887(2) of ITA 2007.
• If the return is not submitted within 3 months after the end of the accounting period, no interest paid by the society in that period can be brought into account as a debit under the loan relationships rules in Part 5.
• This exclusion applies to all interest payments, including amounts that are treated as interest under section 499 (which deems certain registered society payments to be interest under a loan relationship).
• The practical effect is a loss of tax relief on interest payments as a penalty for late filing of the return.