Is this an allowable expense?

Question:
Are VAT penalties/surcharges an allowable expense in a company's accounts for tax purposes when calculating the CT liabilities?

Arthur Weller replies:
Look at hmrc.gov.uk/manuals/bimmanual/BIM31610.htm where you can see that the following payments are not deductible in computing any income, profits or losses for tax purposes:

i) A penalty under any of Value Added Tax Act 1994 (VATA 1994), ss 6070; 
ii) Interest payable under VATA 1994, s 74; 
iii) A surcharge under VATA 1994, s 59.
Are VAT penalties/surcharges an allowable expense in a company's accounts for tax purposes when calculating the CT liabilities?

Arthur Weller replies:
Look at
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This question was first printed in Business Tax Insider in May 2013.