Taxes Management Act 1970

[F1 87A Interest on overdue corporation tax etc. U.K.

(1) Corporation tax shall carry interest at the [F2 rate applicable under section 178 of the Finance Act 1989] from the date when the tax becomes due and payable (in accordance with [F3 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 [F4 or treated as assessed] by virtue of section [F5 346(2) or 347(1) of the principal Act, [F6 137(4), 139(7) [F7 or 190] F8 ... of the 1992 Act F9 ... [F10 paragraph 75A(2) of Schedule 18 to the Finance Act 1998]]][F11 , Schedule 28 to the Finance Act 2000 or paragraph 69 of Schedule 29 to the Finance Act 2002] (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.

F12 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F13 (4A) In a case where—

(a) there is for an accounting period of a company (“the later period”) [F14 a non-trading deficit on the company’s loan relationships,]

(b) as a result of a claim under [F15 section 83(2)(c) of the Finance Act 1996 or paragraph 4(3) of Schedule 11 to that Act the whole or part of the deficit for the later period is set off against profits] of an earlier accounting period (“the earlier period”), and

[F16 (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,]

[F17 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 [F18 as mentioned in subsection (8) below].]]

F19 (4B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(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 [F23 (whether under section 393A(1) or 393B(3))] 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 [F24 as mentioned in subsection (8) below].

F25 (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

[F26 (8) In subsections (4), (4A) and (6) above, any reference to the date on which corporation tax for an accounting period became, or would have become, due and payable shall be construed on the basis that corporation tax for an accounting period becomes due and payable on the day following the expiry of nine months from the end of the accounting period.]

[F27 (9) The power conferred by section 59E of this Act (alteration of date on which corporation tax becomes due and payable) does not include power to make provision in relation to subsection (4), (4A), (6) or (8) above the effect of which would be to change the meaning of references in subsection (4), (4A) or (6) above to the date on which corporation tax for an accounting period became, or would have become, due and payable (as mentioned in subsection (8) above).]]

Textual Amendments

F1 S. 87A inserted by Finance (No. 2) Act 1987 (c. 51), ss. 85, 95(2)

F2 Finance Act 1989, s. 179(1)(b) and S.I. 1989/1298.

F3 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

F4 Words in s. 87A(3) inserted (with effect in accordance with s. 98(2), Sch. 29 para. 9(3)) of the amending Act) by Finance Act 2000 (c. 17), Sch. 28 para. 3(4)(a), Sch. 29 para. 9(2)(a) (with Sch. 29 para. 46(5))

F5 Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 29 para. 10(4)(b).

F6 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))

F7 Words in s. 87A(3) inserted (with effect in accordance with Sch. 29 para. 9(3) of the amending Act) by Finance Act 2000 (c. 17), Sch. 29 para. 9(2)(b) (with Sch. 29 para. 46(5))

F8 Words in s. 87A(3) repealed (with effect in accordance with Sch. 29 para. 4(7) of the amending Act) by Finance Act 2000 (c. 17), Sch. 40 Pt. 2(12)

F9 Word in s. 87A(3) repealed (with effect in accordance with s. 98(2) of the amending Act) by Finance Act 2000 (c. 17), Sch. 40 Pt. 2(11)

F10 Words in s. 87A(3) substituted (with effect in accordance with s. 92(7) of the amending Act) by Finance Act 1999 (c. 16), s. 92(5)

F11 Words in s. 87A(3) substituted (with effect in accordance with s. 84(1) of the amending Act) by Finance Act 2002 (c. 23), Sch. 29 para. 69(4)

F12 S. 87A(4) repealed (with effect in accordance with Sch. 3 para. 4(4) of the amending Act) by Finance Act 1998 (c. 36), Sch. 3 para. 4(2), Sch. 27 Pt. 3(2)

F13 S. 87A(4A) inserted (27.7.1993) by 1993 c. 34, s. 170, Sch. 18 para.1

F14 Words in s. 87A(4A)(a) substituted (with effect in accordance with s. 105(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 14 para. 1(1)(a) (with Sch. 15)

F15 Words in s. 87A(4A)(b) substituted (with effect in accordance with s. 105(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 14 para. 1(1)(b) (with Sch. 15)

F16 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

F17 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

F18 Words in s. 87A(4A) substituted (with effect in accordance with Sch. 4 para. 4(5)(6) of the amending Act) by Finance Act 1998 (c. 36), Sch. 4 para. 4(2); S.I. 1998/3173, art. 2

F19 S. 87A(4B) repealed (with effect in accordance with Sch. 3 para. 4(5) of the amending Act) by Finance Act 1998 (c. 36), Sch. 3 para. 4(3), Sch. 27 Pt. 3(2)

F20 Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 29 para. 10(4)(d).

F21 Finance Act 1989, s. 179(1)(b), S.I. 1989/1298.

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

F23 Words in s. 87A(6)(a) inserted (with effect in accordance with s. 111(3) of the amending Act) by Finance Act 2008 (c. 9), Sch. 35 para. 1

F24 Words in s. 87A(6) substituted (with effect in accordance with Sch. 4 para. 4(5)(6) of the amending Act) by Finance Act 1998 (c. 36), Sch. 4 para. 4(2); S.I. 1998/3173, art. 2

F25 S. 87A(7) repealed (with effect in accordance with Sch. 3 para. 4(5) of the amending Act) by Finance Act 1998 (c. 36), Sch. 3 para. 4(3), Sch. 27 Pt. 3(2)

F26 S. 87A(8) inserted (with effect in accordance with Sch. 4 para. 4(5)(6) of the amending Act) by Finance Act 1998 (c. 36), Sch. 4 para. 4(3); S.I. 1998/3173, art. 2

F27 S. 87A(9) inserted (with effect in accordance with Sch. 4 para. 4(5)(6) of the amending Act) by Finance Act 1998 (c. 36), Sch. 4 para. 4(4); S.I. 1998/3173, art. 2

Modifications etc. (not altering text)

C1 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))

C2 S. 87A modified (3.5.1994) by Finance Act 1994 (c. 9), s. 250(4)(5)

C3 S. 87A applied (with effect in accordance with s. 117(4)(5) of the amending Act) by Finance Act 1998 (c. 36), Sch. 18 para. 52(6) (with Sch. 18 para. 59(2)); S.I. 1998/3173, art. 2

C4 S. 87A applied (with modifications) (with effect in accordance with reg. 1(2) of the amending S.I.) by The Corporation Tax (Instalment Payments) Regulations 1998 (S.I. 1998/3175), regs. 1(1), 7

C5 S. 87A modified (with effect in accordance with s. 63(4) of the amending Act) by Finance Act 2000 (c. 17), Sch. 15 para. 63(2)

Marginal Citations

M1 1882 c. 61.