Company bank interest on the CT600: which box and how it's taxed

In short: Company bank interest goes in box 170 of the Company Tax Return (CT600), "Bank, building society or other interest, and profits from non-trading loan relationships", not in turnover or trading profits. For most companies it is a non-trading loan relationship credit, taxed even when the company doesn't trade (HMRC: The Company Tax Return guide). Taxley prepares and files the CT600 for £44.50 (promotion price until 31 Dec 2026; £89.00 from 1 Jan 2027) with micro-entity accounts, then files the accounts at Companies House once the return is paid and finished.

Take the 30-second check to see whether Taxley fits your company, or see what goes in each CT600 box.

Key facts (checked on 1 October 2026)

Where does company bank interest go on the CT600?

In box 170. HMRC's guide says box 170 holds the company's non-trading profits from its loan relationships, with all non-trading credits and debits combined into a single figure. When the result is a deficit, it goes in box 795 instead (HMRC: The Company Tax Return guide). The interest stays out of turnover and trading profits.

Three details on the same page are easy to miss. Box 170 excludes restitution interest, which has its own supplementary page, the CT600K. The box 170 figure is net of any deficit carried back from a later accounting period, and box 172 is ticked when it is. And HMRC asks for a detailed calculation of the box 170 figure in the computation that goes with the return (HMRC: The Company Tax Return guide). Bank interest doesn't belong in box 185 either: HMRC says that box, "Income from which Income Tax has been deducted", excludes any amount included in box 170 (HMRC: box 185). For a company whose trade isn't lending money, the interest isn't trading income, so it stays out of box 145 (turnover) and box 155 (trading profits). Taxley's CT600 boxes explained page lists the neighbouring boxes.

Why is bank interest a non-trading loan relationship credit?

Because a bank deposit is a loan relationship that most companies don't hold for the purposes of their trade. HMRC's manual says a company has trading loan relationships as a lender only if the lending is an integral part of its trade, which usually means banks, insurers and financial traders (HMRC manual CFM32020). For other companies, interest received is non-trading.

The law starts from the debt. A company has a loan relationship when it is a creditor or debtor for a money debt arising from a transaction for the lending of money (CTA 2009 s.302). Money on deposit fits: an HMRC manual example treats a deposit with the bank as a non-trading loan relationship, and the interest received as a non-trading loan relationship credit (HMRC manual TTR20230). A company counts as a party to a lending relationship for its trade only if it is party to it in the course of activities forming an integral part of the trade (CTA 2009 s.298).

HMRC's manual sums it up: a company has a non-trading loan relationship if it has no trade, like an investment company, or has a trade but holds the loan relationship for investment or other non-trade purposes (HMRC manual CFM32030). Borrowing works differently. Interest a company pays on a loan taken out for its trade is a trading debit, deducted in working out the trading profit (HMRC manual CFM32020).

Is bank interest taxable if the company doesn't trade?

Yes. Corporation Tax on income applies to any non-trading profits a company has from its loan relationships, with or without a trade (CTA 2009 s.299). GOV.UK also counts getting interest as trading for its dormant test, so a company earning bank interest isn't dormant for Corporation Tax (GOV.UK: Dormant for Corporation Tax).

That has two practical effects. The first is that HMRC expects to hear about it. A company that becomes active must tell HMRC within 3 months of its accounting period starting (HMRC: Corporation Tax trading and non-trading). A company chargeable to tax for a period that hasn't received a notice to deliver a return must tell HMRC within 12 months of the end of that period (FA 1998 Sch 18 para 2).

The second is that the rate may be higher than expected. The small profits rate isn't available to a close investment-holding company (CTA 2010 s.18A), and GOV.UK lists such companies among those that can't claim marginal relief (GOV.UK: Marginal Relief for Corporation Tax). A close company is a close investment-holding company unless, throughout the period, it exists wholly or mainly for permitted purposes, such as trading commercially or letting land commercially (CTA 2010 s.18N). A company that has stopped trading and only holds cash should check this before working out its tax.

How is bank interest worked out in the tax computation?

It follows the accounts. HMRC's manual says the credits and debits taxed under the loan relationship rules are those recognised under generally accepted accounting practice, including interest receivable (HMRC manual CFM30170). So the taxable figure is the interest the accounts recognise for the period, which under accruals accounting can include interest earned but not yet paid in.

Before box 170, net off any non-trading debits. Interest a property company pays on its borrowing, for example, is a non-trading debit, because a property business isn't a trade for this purpose, so it is set against the interest received (HMRC manual CFM32030). A trading company's interest on trade borrowing stays in its trading profit instead. If the debits are larger, the net deficit goes in box 795. It can then be set against total profits of the same period, set against non-trading profits of the previous 12 months, carried forward, or surrendered as group relief. A claim that reduces an earlier period's tax is one reason to tick box 45, covered in our guide to CT600 tick boxes 38 to 75.

Box 170 then joins the company's other profits in box 235, "Profits before other deductions and reliefs". The rate thresholds use augmented profits: taxable total profits (box 315) plus qualifying exempt distributions received, such as dividends, other than excluded ones like dividends from a 51% subsidiary (HMRC manual CTM03915). Augmented profits of £50,000 or less get the 19% small profits rate, over £250,000 the main rate, and marginal relief applies in between, with both limits reduced for short periods and associated companies (GOV.UK: Corporation Tax rates). Our Corporation Tax rates and marginal relief guide has the full rules.

What does a worked example of company bank interest look like?

Two companies with a 12-month accounting period ending on 31 March 2026 show the effect. A trading company with £30,000 of trading profits and £600 of bank interest has £30,600 of taxable profits and pays £5,814. A company that has stopped trading and earns £1,800 of interest pays £342, or £450 as a close investment-holding company.

Example 1: a trading company with bank interest (assumes no associated companies, no other income, and not a close investment-holding company)

The interest adds £114 to the bill, 19% of £600. Total profits of £30,600 are below the £50,000 limit, so the small profits rate applies to all of them (GOV.UK: Corporation Tax rates). Had the interest taken profits above £50,000, the company would pay the main rate less marginal relief. Taxley's free Corporation Tax calculator works that out for any profit figure.

Example 2: a company that has stopped trading and holds cash on deposit

The company has no trade in the period, so the trading boxes stay empty and the interest is its only taxable profit. The £108 difference comes only from the rate: a close investment-holding company can't use the small profits rate (CTA 2010 s.18A) and pays the 25% main rate on all its profits (GOV.UK: Corporation Tax rates). In both examples the tax is due on 1 January 2027, 9 months and 1 day after the period ends (GOV.UK: Pay your Corporation Tax bill), and the return on 31 March 2027.

Can Taxley put bank interest in box 170 for you?

Yes. Taxley (taxley.co.uk), UK online software that prepares and files the Company Tax Return (CT600) with HMRC and the annual accounts with Companies House, takes the interest from your profit and loss figures and works out box 170 itself. It nets off any non-trading interest paid and sends a net deficit to box 795.

In the Advanced editor the line is "Interest received", with a note that it is taxed as non-trading income in box 170, not as part of the trading or rental profit. Simple mode calls it "Interest income". The box-by-box Full CT600 view shows it as "Interest receivable (non-trading loan relationship credits)", feeding box 170. Enter the interest before any tax deducted, as the accounts show it. For a first period longer than 12 months, which Taxley files as two returns, you can enter the interest earned in each period; otherwise Taxley splits it by days. If a trading company had no sales but did have interest or dividends, Taxley asks whether it is a close investment-holding company, because the answer decides the rate. Overseas interest goes under Foreign income, with relief for foreign tax.

Taxley doesn't deduct non-trading deficits from before 1 April 2017; it keeps them in their own pool and tells you. It doesn't support companies in liquidation or administration. The fee is £44.50 (promotion price until 31 Dec 2026; £89.00 from 1 Jan 2027) with micro-entity accounts or £84.50 (promotion price until 31 Dec 2026; £169.00 from 1 Jan 2027) with small-company accounts, including filing the accounts at Companies House once the return is paid and finished. Take the 30-second check to see whether Taxley fits your company, or start your return.

Frequently asked questions

Does bank interest count as turnover on the CT600?

No. Box 145 is total turnover from trade, and for a company whose trade isn't lending money, bank interest isn't trading income. It goes in box 170, separate from trading profits (HMRC: The Company Tax Return guide).

Can a company with only bank interest be dormant?

No. GOV.UK includes getting interest in what counts as trading for the dormant test (GOV.UK: Dormant for Corporation Tax). A company HMRC treats as dormant that starts earning interest should tell HMRC it is active, and its CT600 shows the interest in box 170.

Is interest HMRC pays on overpaid Corporation Tax taxable?

Yes. GOV.UK says the interest HMRC pays when a company pays early, or pays more than it owes, is taxable, and that it must be included as income in the Company Tax Return (GOV.UK: Get a refund or interest on your Corporation Tax).

Which period does interest paid once a year belong to?

The period the accounts recognise it in. Loan relationship credits follow generally accepted accounting practice (HMRC manual CFM30170), so interest earned up to the year end usually belongs to that year, even if the bank pays it in afterwards.

What if the company paid more non-trading interest than it received?

Then it has a non-trading deficit rather than a profit, and the deficit goes in box 795 instead of box 170. It can be set against other profits of the same period, carried back 12 months against non-trading profits, carried forward or surrendered as group relief (HMRC manual CFM32030).

General information, not personalised tax or accounting advice.