Withholding tax as expense?

[Seasoningoflife]

Hello,
Company has paid WHT on interest on loan. How should it be treated in company accounts?

DR ????
CR Bank Account?

Is withholding tax is deductible?

 

[David Griffiths]

When you say paid, I interpret that as paying the tax to the relevant tax authority, as opposed to suffering it as a deduction when interest is paid to you.

Treat it as interest. You are simply paying part of the interest to a tax authority. It doesn't matter from an accounting point of view if you pay £100 gross to the lender or pay (say) £80 to the lender and £20 in witholding tax. It's tax deductible if the interest is tax deductible.