Question:
Are VAT penalties/surcharges an allowable expense in a company's accounts for tax purposes when calculating the CT liabilities?
Arthur Weller replies:
Look at hmrc.gov.uk/manuals/bimmanual/BIM31610.htm where you can see that the following payments are not deductible in computing any income, profits or losses for tax purposes:
i) A penalty under any of Value Added Tax Act 1994 (VATA 1994), ss 6070;
ii) Interest payable under VATA 1994, s 74;
iii) A surcharge under VATA 1994, s 59.
