Administration of UK withholding tax on yearly interest and other types of income
Administration of UK withholding tax on yearly interest and other types of income

The following Tax guidance note provides comprehensive and up to date legal information covering:

  • Administration of UK withholding tax on yearly interest and other types of income
  • Section 946 payments
  • Whose obligation?
  • Withholding tax obligation arises when the payment is made
  • Return periods
  • Return
  • Tax statement
  • Paying tax to HMRC
  • Enforcement

This Practice Note outlines the key administrative obligations, including the due date for:

  1. submitting information returns, and

  2. paying the tax to HMRC

in respect of the types of payments listed in section 946 of the Income Tax Act 2007 (ITA 2007) from which UK income tax must be deducted by the payer (section 946 payments).

This note does not cover:

  1. the administrative regime applicable to withholding tax:

    1. which is required to be deducted by a person that is not a UK tax resident company, or

    2. imposed on other types of income, such as employment income, or

  2. all the information reporting obligations imposed on the person required to deduct the tax

Section 946 payments

Section 946 payments include:

  1. a payment from which a UK tax resident company is required to deduct UK income tax under the provisions relating to:

    1. payments of yearly interest

    2. payments in respect of building society securities

    3. payments of UK public revenue dividends

    4. annual payments

    5. patent royalties

    6. royalty payments where the owner lives outside the UK (for more information on UK withholding tax on royalties, see Practice Note: Withholding tax on royalties)

    7. proceeds of a sale of patent rights paid to non-UK residents

    8. chargeable payments connected with exempt distributions

    9. directions by HMRC requiring deduction from payments made to non-UK residents, and

  2. a payment from which a company is required to