HMRC is contacting businesses to update them on redress payments on the taxation of interest rate hedging products and warning them that payments must be reported in Q1 tax returns
This follows the release of updated guidance for those who are entitled to, or may have received redress payments from banks that have sold them interest rate hedging products.
Businesses will need to include any redress payments as business income in tax returns due in the first quarter of 2015. The letter will also be copied to the tax agent for the business.
The sample letter and more information is available from the CIOT at http://www.tax.org.uk/tax-policy/newsdesk/2014/HMRC_letters_interest_rate_hedging_prods