Trade or non-trade interest on a CT600
Short version. Interest is not automatically trading just because a trading company receives or pays it. Loan relationship treatment depends on the relationship and its purpose. The classification can affect how a loss is relieved, even when the total interest in the accounts stays the same.
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1. Start with the relationship and purpose
Borrowing undertaken for the trade can produce trading interest expenses. Lending has a narrower test: being a lender must form an integral part of the trade. Interest on an ordinary company’s bank deposit is therefore usually non-trading, rather than trading turnover.
Consider how funds are used during the period. Where borrowing serves both trade and non-trade purposes, the relevant expenses need the appropriate division. Do not treat loan capital repayments as interest.
2. Why the distinction matters
Trading credits and debits enter the trading result. Non-trading loan relationship amounts form a separate result and can leave a non-trading deficit. Their loss rules differ. Read the non-trading deficit guide before choosing a claim.
Fictional example: total borrowing interest is £1,200, of which £800 relates to the trade and £400 to investment borrowing. The accounts still show £1,200. The tax treatment separates the trade part and non-trade part, rather than deducting £1,200 and another £800.
3. Review your entered treatment
SimpleCompanyTax uses the figures and treatment choices you supply. In Financial data, the Interest used for the trade field is the trade part of the total interest payable, not an additional expense. Use zero when none of that borrowing relates to the trade.
For a property-only company, use the relevant interest/finance-cost inputs and keep the rental result separate. On a long period, review the interest treatment in both tax computations and complete any allocation control the filing shows. This classification is separate from assigning another claim to a particular return.
Check the accounts interest total, adjusted trading result, non-trading result and remaining loss balances before approval. The filing guide shows the Financial data and review steps. Take advice if you need help deciding the treatment. We do not establish it from your supporting records.