Taxes Management Act 1970 (c. 9)

PART IX U.K. INTEREST ON OVERDUE TAX

Modifications etc. (not altering text)

C1 Pt. IX (ss. 86-92) applied (27.7.1993 with effect in relation to the year 1993-94 and subsequent years of assessment) by 1993 c. 34, s. 122(2)(3)

C2 See—Finance Act 1984 (c. 43), Sch.14 para.6(4)—notwithstanding anything in Part IX payments of capital gains tax postponed under Finance Act 1984 Sch.14 not to carry interest for any period before tax becomes payable under Finance Act 1984 Sch.14 para.11; Finance Act 1989 (c. 26), s. 124, Sch. 14 para. 5—payment by installments of capital gains tax on gifts; S.I. 1987/530, reg. 11(3)—tax under assessments in relation to non-resident entertainers and sportsmen to be treated for the purposes of Part IX as income tax under Sch. D.

[F1 86 Interest on overdue income tax and capital gains tax. U.K.

(1) The following, namely—

(a) any amount on account of income tax which becomes due and payable in accordance with section 59A(2) of this Act, and

(b) any income tax or capital gains tax which becomes due and payable in accordance with section 55 or 59B of this Act,

shall carry interest at the rate applicable under section 178 of the Finance Act 1989 from the relevant date until payment.

(2) For the purposes of subsection (1)(a) above the relevant date is whichever of the dates mentioned in section 59A(2) of this Act is applicable; and for the purposes of subsection (1)(b) above the relevant date is—

(a) in any such case as is mentioned in subsection (3) of section 59B of this Act, the last day of the period of three months mentioned in that subsection; and

(b) in any other case, the date mentioned in subsection (4) of that section.

(3) Subsection (1) above applies even if the relevant date is a non-business day within the meaning of section 93 of the Bills of Exchange Act 1882.

(4) Subsection (5) below applies where as regards a year of assessment—

(a) any person makes a claim under subsection (3) or (4) of section 59A of this Act in respect of the amounts (the section 59A amounts) payable by him in accordance with subsection (2) of that section, and

(b) an amount (the section 59B amount) becomes payable by him in accordance with section 59B(3), (4) or (5) of this Act.

(5) Interest shall be payable under this section as if each of the section 59A amounts had been equal to—

(a) the aggregate of that amount and 50 per cent. of the section 59B amount, or

(b) the amount which would have been payable in accordance with subsection (2) of section 59A of this Act if the claim under subsection (3) or (4) of that section had not been made,

whichever is the less.

(6) In determining for the purposes of subsections (4) and (5) above what amount (if any) is payable by any person in accordance with section 59B(3), (4) or (5) of this Act—

(a) it shall be assumed that both of the section 59A amounts have been paid, and

(b) no account shall be taken of any amount which has been paid on account otherwise than under section 59A(2) of this Act or is payable by way of capital gains tax.

(7) Subsection (8) below applies where as regards any person and a year of assessment—

(a) amounts (the section 59A amounts) become payable by him in accordance with section 59A(2) of this Act, and

(b) an amount (the section 59B amount) becomes repayable to him in accordance with section 59B (3), (4) or (5) of this Act.

(8) So much of any interest payable under this section on either of the section 59A amounts as is not attributable to the amount by which that amount exceeds 50 per cent. of the section 59B amount shall be remitted.

(9) In determining for the purposes of subsections (7) and (8) above what amount (if any) is repayable to any person in accordance with section 59B(3), (4) or (5) of this Act, no account shall be taken of any amount which has been paid on account otherwise than under section 59A(2) of this Act or is payable by way of capital gains tax.]

Textual Amendments

F1 S. 86 substituted (with effect in accordance with ss. 103(7), 110(2)-(4) of the amending Act) by Finance Act 1995 (c. 4), s. 110(1)

Modifications etc. (not altering text)

C3 S. 86 applied (N.I.) (1.7.1992) by Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7), ss. 15(3), 173(4), Sch. 2 para. 6(1)

C4 S. 86 excluded (E.W.S.) (1.7.1992) by Social Security Contributions and Benefits Act 1992 (c. 4), ss. 16(3), 177(4), Sch. 2 para. 6(1) (as substituted temporarily until 19.4.1993 by Social Security (Consequential Provisions) Act 1992 (c. 6), ss. 6, 7(2), Sch. 4 para. 8; S.I. 1993/1025, art. 2)

C5 S. 86 excluded (N.I.) (1.7.1992) by Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7), ss. 15(3), 173(4), Sch. 2 para. 6(1) (as substituted temporarily until 19.4.1993 by Social Security (Consequential Provisions) (Northern Ireland) Act 1992 (c. 9), ss. 6, 7(2), Sch. 4 para. 7; S.I. 1993/1079, art. 2)

C6 S. 86 modified by Income and Corporation Taxes Act 1988 (c. 1), s. 767B(1)(a) (as inserted (with effect in accordance with s. 135(6) of the amending Act) by Finance Act 1994 (c. 9), s. 135(1)(6))

F2 86A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.K.

Textual Amendments

F2 S. 86A added byDevelopment Land Tax Act 1976 (c. 24) Sch.8 para.21. Development Land Tax Act 1976 repealed by Finance Act 1985 (c. 54), s.98(6), Sch.27 Part X.

[F3 87 Interest on overdue advance corporation tax and income tax on company payments. U.K.

(1) Any tax assessable in accordance with Schedule [F4 13] or [F4 16] to [F4 the principal Act] shall carry interest at the [F5 rate applicable under section 178 of the Finance Act 1989] from the date when the tax becomes due and payable until payment .

(2) Where—

(a) advance corporation tax paid in respect of distributions made in any return period is repaid under paragraph 4 of the said Schedule [F4 13] in consequence of the receipt of franked investment income in a later return period; or

(b) income tax paid in respect of payments made in any return period is repaid or discharged under paragraph 5 of the said Schedule [F4 16] in consequence of the receipt in a later return period of a payment on which income tax is borne by deduction,

the repayment or discharge shall not affect interest under this section on the tax so repaid or discharged for such time as is specified in subsection (3) below but, subject to that, this section shall apply as if any such tax which is repaid or discharged had never become payable.

(3) The time for which interest is not affected is—

(a) any time before the expiration of fourteen days from the end of the later return period, unless the return for that period is made earlier in those fourteen days; and

(b) if that return is made earlier in those fourteen days, any time ending before the date on which the return is made.

F6 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) Subsection (4) above shall have effect as if all advance corporation tax due from a company in accordance with paragraph 3(1) of the said Schedule [F4 13] for any return period, whether or not it is actually assessed, were included in a single assessment, and similarly in the case of all income tax due from a company in accordance with paragraph 4(1) of the said Schedule [F4 16] for any return period.

(6) In this section “return period” means a period for which a return is required to be made under the said Schedule [F4 13] or [F4 16].

(7) It is hereby declared that this section applies to advance corporation tax and income tax which, in accordance with either of those Schedules, is paid without the making of any assessment (but is paid after it is due), and that where the tax is charged by an assessment (whether or not any part of it has been paid when the assessment is made) this section applies as respects interest running before as well as after the making of the assessment.

[F7 (8) Tax assessable as mentioned in subsection (1) above shall carry interest from the date when it becomes due and payable even if that date is a non-business day within the meaning of section 92 of the Bills of Exchange Act 1882.]]

Textual Amendments

F3 S. 87 substituted by Finance Act 1972 (c. 41), s.111, Sch.24 para.10 for 1973—74 et seq.

F4 Income and Corporation Taxes Act 1988 (c. 1), Sch. 29 para. 32.

F5 Finance Act 1989 (c. 26), s. 179(1)(b); S.I. 1989/1298 (from 18 August 1989)

F6 S. 87(4) repealed (with effect in respect of assessments relating to an accounting period beginning on or after 19.4.1993) by Finance Act 1989 (c. 26), s. 158; S.I. 1993/753

F7 S. 87(8) added by Finance (No.2) Act 1975 (c. 45), s.46(3)(b) in relation to tax charged by assessments notices of which were issued after 31 July 1975.

Modifications etc. (not altering text)

C7 See—S.I. 1986/482, reg. 7(4)—application of s. 87 to tax to which Finance Act 1972 Sch. 20 applies by virtue of S.I. 1986/482, reg. 7; S. I. 1987/530, reg. 14(2)—modification of s. 87 in relation to tax assessable in respect of non-resident entertainers and sportsmen.

C8 S. 87(1)(7)(8) applied (1.10.1993) by The Income Tax (Manufactured Overseas Dividends) Regulations 1993 (S.I. 1993/2004), reg.11(10)

C9 S. 87(1)(7)(8) applied (with modifications) (25.8.1995) by The Income Tax (Manufactured Dividends) (Tradepoint) Regulations 1995 (S.I. 1995/2052), regs. 1, 12(9)

C10 See—Finance Act 1981 (c. 35), s.134, Sch. 17 para. 15(4)—application of this section to the special tax on banking deposits.

[F8 87A Interest on overdue corporation tax etc. U.K.

(1) Corporation tax shall carry interest at the [F9 rate applicable under section 178 of the Finance Act 1989] from the date when the tax becomes due and payable (in accordance with [F10 section 59D of this Act]) until payment.

(2) Subsection (1) above applies even if the date when the tax becomes due and payable (as mentioned in that subsection) is a non-business day within the meaning of section 92 of the M1 Bills of Exchange Act 1882.

(3) In relation to corporation tax assessed by virtue of section [F11 346(2) or 347(1) of the principal Act, [F12 137(4), 139(7) or 179(11) of the 1992 Act or section 96(8) of the Finance Act 1990]] (which enable unpaid corporation tax assessed on a company to be assessed on other persons in certain circumstances), the reference in subsection (1) above to the date when the tax becomes due and payable is a reference to the date when it became due and payable by the company.

(4) [F13 Subject to [F14 subsections (4B) and (7)] below] in any case where—

(a) there is in any accounting period of a company (in this subsection referred to as “the later period”) an amount of surplus advance corporation tax, as defined in subsection (3) of section [F15 239 of the principal Act], and

(b) pursuant to a claim under the said subsection (3), the whole or any part of that amount is treated for the purposes of the said section [F15 239] as discharging liability for an amount of corporation tax for an earlier accounting period (in this subsection referred to as “the earlier period”), and

(c) disregarding the effect of the said subsection (3), an amount of corporation tax for the earlier period would carry interest in accordance with this section,

then, in determining the amount of interest payable under this section on corporation tax unpaid for the earlier period, no account shall be taken of any reduction in the amount of that tax which results from the said subsection (3) except so far as concerns interest for any time after the date on which any corporation tax for the later period became due and payable (as mentioned in subsection (1) above).

F16 [(4A) In a case where—

(a) there is for an accounting period of a company (“the later period”) a relievable amount within the meaning of section 131 of the Finance Act 1993 (non-trading exchange gains and losses),

(b) as a result of a claim under subsection (5) or (6) of that section the whole or part of the relievable amount for the later period is set off against the exchange profits (as defined in subsection (10) of that section) of an earlier accounting period (“the earlier period”), and

[F17 (c) if the claim had not been made, there would be an amount or, as the case may be, an additional amount of corporation tax for the earlier period which would carry interest in accordance with this section,]

[F18 then, for the purposes of the determination at any time of whether any interest is payable under this section or of the amount of interest so payable, the amount mentioned in paragraph (c) above shall be taken to be an amount of unpaid corporation tax for the earlier period except so far as concerns interest for any time after the date on which any corporation tax for the later period became (or, as the case may be, would have become) due and payable as mentioned in subsection (1) above.]]

[F19 (4B) Where, in a case falling within subsection (4A)(a) and (b) above—

(a) there is in the earlier period, as a result of the claim under section 131(5) or (6) of the Finance Act 1993, an amount of surplus advance corporation tax, as defined in section 239(3) of the principal Act, and

(b) pursuant to a claim under the said section 239(3), the whole or any part of that amount is to be treated for the purposes of section 239 of the principal Act as discharging liability for an amount of corporation tax for an accounting period before the earlier period,

the claim under the said section 239(3) shall be disregarded for the purposes of subsection (4A) above but subsection (4) above shall have effect in relation to that claim as if the reference in the words after paragraph (c) to the later period within the meaning of subsection (4) above were a reference to the period which, in relation to the claim under section 131(5) or (6) of the Finance Act 1993, would be the later period for the purposes of subsection (4A) above.]

(5) A sum assessed on a company by such an assessment as is referred to in [F20 section 252(5) of the principal Act] (recovery of payment of tax credit or interest on such a payment) shall carry interest at the [F21 rate applicable under section 178 of the Finance Act 1989] from the date when the payment of tax credit or interest was made until the sum assessed is paid.

F22 [(6) In any case where—

(a) on a claim under section 393A(1) of the principal Act, the whole or any part of a loss incurred in an accounting period (“the later period”) has been set off for the purposes of corporation tax against profits of a preceding accounting period (“the earlier period”);

(b) the earlier period does not fall wholly within the period of twelve months immediately preceding the later period; and

(c) if the claim had not been made, there would be an amount or, as the case may be, an additional amount of corporation tax for the earlier period which would carry interest in accordance with this section,

then, for the purposes of the determination at any time of whether any interest is payable under this section or of the amount of interest so payable, the amount mentioned in paragraph (c) above shall be taken to be an amount of unpaid corporation tax for the earlier period except so far as concerns interest for any time after the date on which any corporation tax for the later period became (or, as the case may be, would have become) due and payable as mentioned in subsection (1) above.

(7) Where, in a case falling within subsection (6)(a) and (b) above—

(a) there is in the earlier period, as a result of the claim under section 393A(1) of the principal Act, an amount of surplus advance corporation tax, as defined in subsection (3) of section 239 of that Act; and

(b) pursuant to a claim under the said subsection (3), the whole or any part of that amount is to be treated for the purposes of the said section 239 as discharging liability for an amount of corporation tax for an accounting period before the earlier period,

the claim under the said subsection (3) shall be disregarded for the purposes of subsection (6) above but subsection (4) above shall have effect in relation to that claim as if the reference in the words after paragraph (c) to the later period within the meaning of subsection (4) above were a reference to the period which, in relation to the claim under the said section 393A(1), would be the later period for the purposes of subsection (6) above.]]

Textual Amendments

F8 S. 87A inserted by Finance (No. 2) Act 1987 (c. 51), ss. 85, 95(2)

F9 Finance Act 1989, s. 179(1)(b) and S.I. 1989/1298. Previously “prescribed rate”. And see S.I. 1989/1297 for regulations made, and interest rate set, under Finance Act 1989, s. 178

F10 Words in s. 87A(1) substituted (with effect in accordance with s. 199(2)(3) of the amending Act) by Finance Act 1994 (c. 9), Sch. 19 para. 24; S.I. 1998/3173, art. 2

F11 Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 29 para. 10(4)(b). Previously “266(2), section 267(3C), section 277(1) or section 278(5) of the Taxes Act”.

F12 Words in s. 87A(3) substituted (6.3.1992 with effect as mentioned in s. 289(1)(2) of the substituting Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 289, 290, Sch. 10 para. 2(9) (with ss. 60, 101(1), 171, 201(3))

F13 Words in s. 87A(4) inserted (27.7.1993) by 1993 c. 34, s. 120, Sch. 14 para. 4(1)

F14 Words in s. 87A(4) substituted (23.3.1995) by Finance Act 1995 (c. 4), Sch. 24 paras. 7, 9(1); S.I. 1994/3224, art. 2

F15 Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 29 para. 10(4)(c)(d). Previously “85 of the Finance Act 1972” and “85”respectively.

F16 S. 87A(4A) inserted (27.7.1993) by 1993 c. 34, s. 170, Sch. 18 para.1

F17 S. 87A(4A)(c) substituted (23.3.1995) by Finance Act 1995 (c. 4), Sch. 24 paras. 7, 8(a); S.I. 1994/3224, art. 2

F18 Words in s. 87A(4A) substituted (23.3.1995) by Finance Act 1995 (c. 4), Sch. 24 paras. 7, 8(b); S.I. 1994/3224, art. 2

F19 S. 87A(4B) inserted (23.3.1995) by Finance Act 1995 (c. 4), Sch. 24 paras. 7, 9(2); S.I. 1994/3224, art. 2

F20 Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 29 para. 10(4)(d). Previously “subsection (2) of section 102 of the Finance Act 1972”

F21 Finance Act 1989, s. 179(1)(b), S.I. 1989/1298. Previously “prescribed rate”. And see S.I. 1989/1297 for regulations made and interest rate set under Finance Act 1989, s. 178

F22 S. 87A(6)(7) substituted (27.7.1993) for s. 87A(6) by 1993 c. 34, s. 120, Sch. 14 para. 4(2)

Modifications etc. (not altering text)

C11 S. 87A modified by Income and Corporation Taxes Act 1988 (c. 1), s. 438A, Sch. 19AB para. 3 (as inserted (25. 7. 1991) by Finance Act 1991 (c. 31), s. 49, Sch. 8)

C12 S. 87A extended (with modifications) by Income and Corporation Taxes Act 1988 (c. 1), s. 438A, Sch. 19AB para. 5(6) (as inserted (25.7.1991) by Finance Act 1991 (c. 31), s. 49, Sch. 8)

S. 87A applied (with modifications) (2.10.1992) by S.I. 1992/2326, reg. 6(5)(6)

C13 S. 87A modified by Income and Corporation Taxes Act 1988 (c. 1), s. 767B(1)(b) (as inserted (with effect in accordance with s. 135(6) of the amending Act) by Finance Act 1994 (c. 9), s. 135(1)(6))

C14 S. 87A modified (3.5.1994) by Finance Act 1994 (c. 9), s. 250(4)(5)

Marginal Citations

M1 1882 c. 61.

88 Interest on tax recovered to make good loss due to taxpayer’s fault. U.K.

(1) Where an assessment has been made for the purpose of making good to the Crown a loss of tax wholly or partly attributable to

[(a) a failure to give a notice, make a return or produce or furnish a document or other information required by or under the Taxes Acts, or

(b) an error in any information, return, accounts or other document delivered to an inspector or other officer of the Board F23 ,]

the tax charged by the assessment, or as the case may be such part thereof as corresponds to the part so attributable, [shall, if an inspector or the Board so determine, carry F24 ] interest at the [rate applicable under section 178 of the Finance Act 1989 F25 ] from the date on which the tax ought to have been paid until payment .

M2 (2) This section shall not apply in relation to [] tax under Schedule [13 or 16 to the principal Act F26 ].

[(3) Where it is finally determined that any tax carries interest under this section, the tax shall carry no interest under section 86 or 86A above, (and, accordingly, any interest under either of those sections which has been paid before the final determination shall be set off against the amount of the interest under this section); and for the purposes of this subsection a determination that tax carries interest is not final until it can no longer be varied, whether by any Commissioners on appeal or by the order of any court F27 .]

M3 (4) The Board may at their discretion mitigate (whether before or after judgment) any interest due under this section and may stay or compound any proceedings for the recovery thereof.

M4 (5) For the purposes of this section thedate when tax ought to have been paid shall be taken to be—

(a) in the case of income tax, 1st January in the year of assessment for which the tax is charged, but subject to paragraphs (b) and (c) below,

(b) in the case of one-half of any income tax specified in section [5(2) F28 ] of the principal Act, the following 1st July,

[(c) in the case of any income tax specified in section [5(4) F28 ] of the principal Act, the following [1st December F29 ] F30 ,]

M5 (d) in the case of capital gains tax, [1st December F29 ] in the year of assessment next following the year for which the tax is charged,

M6 (e) in the case of corporation tax, the date nine months from the end of the accounting period for which the tax is charged F31 . . . F32

(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F33

[(6) Tax charged by an assessment mentioned in subsection (1) above shall carry interest from the date when it ought to have been paid even if that date was a non-business day within the meaning of section 92 of the Bills of Exchange Act 1882 F34 .]

(7) In paragraph (a) of subsection (1) above the reference to a failure to do something includes, in relation to anything required to be done at a particular time or within a particular period, a reference to a failure to do it at that time or within that period; and, accordingly, section 118(2) of this Act shall not apply for the purposes of that paragraph F35 .]

Textual Amendments

F23 Finance Act 1989 (c. 26), s. 159(2)in relation to failures occurring, and errors in any information or documents delivered, on or after 27 July 1989.

F24 Finance Act 1989 (c. 26), s. 160(1).

F25 Finance Act 1989 (c. 26), s. 179(1)(b)(i); S.I. 1989/1298from 18 August 1989

F26 Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1) Sch. 29 para. 32previously amended by Finance Act 1972 s.111andSch.24 para.11.

F27 Finance Act 1989 (c. 26), s. 161.

F28 Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1) Sch. 29 para. 32

F29 Finance Act 1980 s.61(4)for1980—81et seq.

F30 Finance Act 1971 ss.37and38andSch.6 para.87for1973—74et seq.

F31 Subs. (e)omitted by Finance (No. 2) Act 1987 s. 86(4)for accounting periods ending after a day to be appointed.

F32 Words repealed by Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1) s. 844and Sch. 31See 1987edition for text.

F33 A development land tax provision added byDevelopment Land Tax Act 1976 (c. 24) Sch.8 para.22 Development Land Tax Act 1976repealed byFinance Act 1985 s.98(6)andSch.27 Part X.

F34 Finance (No.2) Act 1975 s.46(4)in relation to tax charged by assessments where notices issued after31July1975.

F35 Finance Act 1989 s. 159(3)in relation to failures occuring, and errors in any information or documents delivered, on or after 27 July 1989.

Modifications etc. (not altering text)

C15 S. 88 extended (25.7.1991) by Finance Act 1991 (c. 31, SIF 63:1), s. 33(3)(c)

C16 S. 88: power to apply conferred (1.5.1995) by Finance Act 1995 (c. 4), s. 73(4)(c)

C17 S. 88(1)(4)(5)(a)(b) applied (N.I.) (1.7.1992) by Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7), ss. 15(3), 173(4), Sch. 2 para. 6(1)

C18 S. 88(1)(4)(5)(a)(b) extended (E.W.S.) (1.7.1992) by Social Security Contributions and Benefits Act 1992 (c. 4), ss. 16(3), 177(4), Sch. 2 para. 6(1) (as substituted temporarily until 19.4.1993 by Social Security (Consequential Provisions) Act 1992 (c. 6), ss. 6, 7(2), Sch. 4 para. 8; S.I. 1993/1025, art.2)

C19 S. 88(1)(4)(5)(a)(b) extended (N.I.) (1.7.1992) by Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7), ss. 15(3), 173(4), Sch. 2 para. 6(1) (as substituted temporarily until 19.4.1993 by Social Security (Consequential Provisions) Act 1992 (c. 9), ss. 6, 7(2), Sch. 4 para. 7; S.I. 1993/1079, art. 2)

C20 SeeFinance Act 1984 Sch.14 para.2(3)(b)—Finance Act 1984 Sch.14not have effect to allow postponement of capital gains tax carrying interest by virtue ofs.88(1),unless the interest by reason of neglect of any person and that neglect is remedied before1July1985.

C21 See Finance (No. 2) Act 1987 s. 86(4)(a)for wording to be inserted for accounting periods ending after a day to be appointed.

C22 SeeFinance Act 1966 s.27andSch.6 para.23(5)—s.88applied to certain proceedings for the recovery of excessive overspill relief underFinance Act 1965 s.84 (transitional relief for companies with overseas trading income).

C23 See—Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1) Sch. 14 para. 7(3)(c)—application of s. 88to sums claimed under s. 266(5)(b)to which the claimant was not entitled.Finance Act 1989 s. 57(3)—application of s. 88to medical insurance relief.

Marginal Citations

M2 1967 Sch.XI 10(3), 12(3).

M3 1960

s.58(7).

M4 1960

s.58(2).

M5 1969

Sch.XX 14(5).

M6 1966

Sch.VI 8(2).

[F36 88A Determinations under section 88. U.K.

(1) Notice of a determination under section 88 above shall be served on the person liable to pay the interest to which it relates and shall specify—

(a) the date on which it is issued,

(b) the amount of the tax which carries interest and the assessment by which that tax was charged,

(c) the date when for the purposes of section 88 above that tax ought to have been paid, and

(d) the time within which an appeal against the determination may be made.

(2) After the notice of a determination under section 88 above has been served the determination shall not be altered except in accordance with this section.

(3) A determination under section 88 above may be made at any time—

(a) within six years after the end of the chargeable period for which the tax carrying the interest is charged (or, in the case of development land tax, of the financial year in which the liability for that tax arose), or

(b) within three years after the date of the final determination of the amount of that tax.

(4) An appeal may be brought against a determination under section 88 above and, subject to the following provisions of this section, the provisions of this Act relating to appeals shall have effect in relation to an appeal against such a determination as they have effect in relation to an appeal against an assessment to tax.

(5) On an appeal against a determination under section 88 above section 50(6) to (8) of this Act shall not apply but the Commisioners may—

(a) if it appears to them that the tax carries no interest under that section, set the determination aside,

(b) if the determination appears to them to be correct, confirm the determination, or

(c) if the determination appears to them to be incorrect as to the amount of tax or the date on which the tax ought to have been paid, revise the determination accordingly.]

Textual Amendments

F36 Finance Act 1989 (c. 26), s. 160(2).

F37 89 The prescribed rate of interest. U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F37 S. 89 repealed (18.8.1989) by Finance Act 1989 (c. 26), ss. 178(7), 187(1), Sch. 17 Part X

90 Disallowance of relief for interest on tax. U.K.

Interest payable under this Part of this Act shall be paid without any deduction of income tax and shall not be allowed as a deduction in computing any income, profits or losses for any tax purposes.

Modifications etc. (not altering text)

C24 S. 90 applied (27.7.1993) by 1993 c. 34, s. 173, Sch. 19 Pt. II para.11(5)

C25 See Oil Taxation Act 1975 (c. 22), s. 1, Sch. 2 paras. 1(1), 15 (Oil Taxation Acts) regarding modification in relation to petroleum revenue tax and supplementary petroleum duty

C26 See Finance Act 1988 (c. 39), Sch. 5 para. 3(4)—payments on account of tax by underwriters.

C27 See Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1) Sch. 19A para. 3as substituted by S.I. 1990 No. 2524.

91 Effect on interest of reliefs. U.K.

(1) Where any amount of interest is payable under section 86 or section 88 of this Act in relation to an assessment, and relief from tax charged by the assessment is given to any person by a discharge of any of that tax, such adjustment shall be made of the said amount, and such repayment shall be made of any amounts previously paid under those provisions in relation to the assessment, as are necessary to secure that the total sum, if any, paid or payable under those provisions in relation to the assessment is the same as it would have been if the tax discharged had never been charged.

[F38 (1A) Where interest is payable under section 87A of this Act in respect of an amount of corporation tax for an accounting period, and relief from tax is given by a discharge of any of that corporation tax—

(a) such adjustment shall be made of the amount of interest payable under that section in respect of corporation tax for that accounting period, and

(b) such repayment shall be made of any amounts of interest previously paid under that section in respect of that corporation tax,

as are necessary to secure that the total sum (if any) paid or payable under that section in respect of corporation tax for that accounting period is the same as it would have been if the tax discharged had never been charged.

(1B) Subsection (1A) above has effect subject to section 87A(4)[F39 , (4A), (4B),] [F40 (6) and (7)] of this Act.]

(2) [F41 Subject to subsection (2A) below] Where relief from tax F42 ... paid for any chargeable period is given to any person by repayment, he shall be entitled to require that the amount repaid shall be treated for the purposes of this section, so far as it will go, as if it were a discharge of the tax charged on him (whether alone or together with other persons) by or by virtue of any assessment for or relating to the same chargeable period, so, however, that it shall not be applied to any assessment made after the relief was given and that it shall not be applied to more than one assessment so as to reduce, without extinguishing, the amount of tax charged thereby.

[F43 (2A) In any case where—

(a) relief from corporation tax is given to any person by repayment, and

(b) that tax was paid for an accounting period ending after the day which is the appointed day for the purposes of section [F44 10 of the principal Act],

that person shall be entitled to require that the amount repaid shall be treated for the purposes of this section, so far as it will go, as if it were a discharge of the corporation tax charged on him for that period.]

(3) Notwithstanding anything in the preceding provisions of this section, no relief, whether given by way of discharge or repayment, shall be treated for the purposes of this section as—

F45 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) affecting tax charged by any assessment to income tax made under Schedule A or Schedule D if either—

F45 (i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(ii) it arises in connection with income taxable otherwise than under Schedule A or Schedule D, or

(iii) it relates to a source income from which is taxable otherwise than under Schedule A or Schedule D [F46 or

(c) affecting tax charged at a rate other than the basic rate [F47 or the lower rate] on income from which tax has been deducted (otherwise than under section [F48 203] of the principal Act) or is treated as having been deducted, unless it is a relief from the tax so charged].

(4) For the purposes of this section a relief from corporation tax or capital gains tax shall not be treated as affecting tax charged by any assessment unless the assessment is to the same tax .

Textual Amendments

F38 S. 91(1A)(1B) inserted (23.7.1987 with effect with respect to accounting periods ending after 30.9.1993) by 1987 c. 51, s. 86(5)(7); S.I. 1992/3066, art.2(2)(a).

F39 Words in s. 91(1B) inserted (23.3.1995) by Finance Act 1995 (c. 4), Sch. 24 paras. 7, 10; S.I. 1994/3224, art. 2

F40 Words in s. 91(1B) inserted (27.7.1993) by 1993 c. 34, s. 120, Sch. 14 para.5

F41 Words in s. 91(2) added (23.7.1987 with effect with respect to accounting periods ending after 30.9.1993) by 1987 c. 51, s. 86(6)(7); S.I. 1992/3066, art.2(2)(a).

F42 Amended in relation to development land tax byDevelopment Land Tax Act 1976 Sch.8 para.24and amendment repealed by1985 s.98(6)andSch.27 Part X.

F43 S. 91(2A) added (23.7.1987 with effect with respect to accounting periods ending after 30.9.1993) by 1987 c. 51, s. 86(6)(7); S.I. 1992/3066, art.2(2)(a).

F44 Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), s. 844, Sch. 29 para. 10(6). Previously “90 of the Finance (No. 2) Act 1987”

F45 Words omitted repealed for 1973—74 et seq. by Finance Act 1971 ss. 37, 38, Sch.6 para.88, Sch.14 Part II.

F46 Finance Act 1971 (c. 68), ss.37, 38, Sch.6 para.88, with effect for 1973—74 et seq.

F47 Words in s. 91(3)(c) inserted (16.7.1992 for the year 1992-93 and subsequent years of assessment) by Finance (No. 2) Act 1992 (c. 48), s. 19(2)(7)

F48 Income and Corporation Taxes Act 1988 (c. 1) Sch. 29 para. 32.

Modifications etc. (not altering text)

C28 See Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1) Sch. 19A para. 3as substituted by S.I. 1990 No. 2524.

C29 See—Taxes Management Act 1970 (c. 9, SIF 63:1) s.109—application ofs.91in relation to tax underFinance Act 1970 ss.286, 288and289.Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1) s.306—s.91not to apply to business expansion scheme relief.

F49 91A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.K.

Textual Amendments

F49 S. 91A added by Development Land Tax Act 1976 (c. 24) Sch.8 para.25. Development Land Tax Act 1976 repealed by Finance Act 1985 (c. 54), s.98(6), Sch.27 Part X.

92 Remission in certain cases of interest on tax in arrear by reason of exchange restrictions. U.K.

(1) The provisions of this section shall have effect where the Board are satisfied as respects any tax carrying interest under section 86 of this Act—

(a) that the tax is in respect of income or chargeable gains arising in a country outside the United Kingdom, and

(b) that, as the result of action of the government of that country, it is impossible for the income or gains to be remitted to the United Kingdom, and

(c) that having regard to the matters aforesaid and to all the other circumstances of the case it is reasonable that the tax should for the time being remain uncollected,

and the Board allow the tax to remain uncollected accordingly.

(2) Interest on the said tax shall, subject to subsection (3) below, cease to run under the said section 86 as from the date on which the Board were first in possession of the information necessary to enable them to be satisfied as aforesaid and, if the said date is not later than three months from the time when the tax became due and payable, the interest thereon under the said section 86 in respect of the period before the said date shall be remitted.

(3) Where, under subsection (2) above, interest has ceased to run on any tax and thereafter demand is made by the collector or other proper officer for payment of all or any of that tax, interest under the said section 86 shall again begin to run from the date of the demand in respect of the amount demanded:

Provided that where all or any part of the amount demanded is paid not later than three months from the date of the demand, the interest under the said section 86 on the amount so paid running from the date of the demand shall be remitted.

Modifications etc. (not altering text)

C30 See—Finance (No. 2) Act 1987 (c. 51), s. 86(3)—references to s. 86 include reference to s. 87A for accounting periods ending after a day to be appointed; Finance Act 1988 (c. 39), Sch. 5 para. 10(2)—reference to s. 86 to include a reference to Income and Corporation Taxes Act 1988 (c. 1), Sch. 5 para. 3(4)—interest on underwriters liabilities.