BIM51655 - Builders, property dealers & developers: Private street works: Payments to local authorities: Interest

Interest allowed by the local authority on amounts paid to it under BIM51645 is interest from which tax is deductible under ICTA88/S349 (see CTM40880). The interest is income in the hands of the recipient

• where the local authority is liable under ICTA88/S349 for the year of payment.
• otherwise, for the year in which the payment becomes due that is the year in which the street is declared to be a highway repairable by the inhabitants at large.

Where interest is appropriated by the local authority towards the cost of the street works, the appropriation should be regarded as constituting a payment of interest to the person entitled thereto.