SAIM2040 - Interest: when does interest run?
Interest cannot be back-dated
Since interest on a loan or debt can normally only run where there is an agreement to pay interest (SAIM2030), it follows that interest cannot be back-dated.
Example
Deborah is a controlling shareholder in Deb바카라 사이트™s Fashions Ltd. When the company started in 2011, she made a loan of £10,000 to the company. There was no agreement in 2011 that the loan should pay interest. In preparing the company accounts for year ended 31 December 2015, the company바카라 사이트™s accountant advises that the company can now afford to pay interest, and accordingly it is agreed on 4 February 2016 that the loan will carry interest at 3% per annum.
The agreement will have effect only from 4 February 2016. The company may make a payment to Deborah to compensate her for the period when she received no interest on the £10,000. Such a payment is not interest, even if it is calculated on a time basis, or if it is described in the company accounts as 바카라 사이트˜interest바카라 사이트™. The tax treatment of such a payment will depend on the exact nature of the arrangements between Deborah and the company.