Taxes Consolidation Act 1997 section 243

Allowance of charges on income

Section 243 provides for the deduction of charges on income paid by a company against its total profits for corporation tax purposes.

• Charges on income include yearly interest, annuities, other annual payments, certain rents related to mining or quarrying, patent royalties and short interest paid to banks, building societies, stockbrokers or discount houses in the EU or the United Kingdom.
• Charges paid during an accounting period are deducted from total profits after other reliefs (such as loss relief) but before group relief, and must be paid out of profits brought into charge to corporation tax.
• Payments to non-residents qualify as charges only where income tax is withheld and accounted for, or the payment falls within specific exemptions such as the Interest and Royalties Directive or quoted Eurobonds.
• Interest is generally not treated as a charge on income, except where it relates to a loan used to acquire a material interest in certain qualifying companies under section 247.