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HMRC invited comments by 22 November on draft regulations dealing with ‘mismatches’ between the tax and accounting treatment of interest and other financing expenses.

The current Finance Bill inserts a regulation making power into TIOPA 2010 Part 7, part of a package of measures arising from the review of the taxation of companies’ foreign profits.

HMRC's technical note indicates that a mismatch can arise where there is a difference between the financial liability of a group company disclosed in the accounts of the worldwide group and the amount of profit or loss brought into account under the loan relationships rules, or where a 'late interest' debit is treated as not accruing until it is paid.