Income and Corporation Taxes Act 1988

F1 Repayment, with interest, of excessive provisional repayments U.K.

Textual Amendments

F1 Sch. 19AB inserted (25.7.1991 with effect as mentioned in s. 49(3) in relation to accounting periods beginning on or after 2.10.1992) by Finance Act 1991 (c. 31, SIF 63:1), s. 49, Sch. 8; S.I. 1992/1746, art.2

F2 3 (1) In any case where—

[F3 (a) an insurance company’s self-assessment for an accounting period becomes final, and

(b) the aggregate amount of the provisional repayments made to the company for that accounting period exceeds the appropriate amount,]

the excess, together with the amount of any relevant interest, shall be treated for the purposes of section 30 of the Management Act as if it were an amount of corporation tax for that accounting period which had been repaid to the insurance company and which ought not to have been so repaid.

[F4 (1A) For the purposes of sub-paragraph (1)(b) above, the appropriate amount for an accounting period of a company is the amount (if any) which, on the assumptions in sub-paragraphs (1B) and (1C) below and disregarding any provisional repayments, the company would be entitled to be paid or repaid, when its self-assessment for the period becomes final, in respect of its pension business for that accounting period on a claim such as is mentioned in section 7 of this Act or section 42(4) of the Management Act in respect of—

(a) income tax borne by deduction on payments received by the company in that accounting period and referable to its pension business, and

(b) tax credits in respect of distributions received by the company in that accounting period and referable to its pension business.

(1B) The first assumption is that no payments or repayments have been made to the company in respect of—

(a) income tax such as is mentioned in paragraph (a) of sub-paragraph (1A) above, or

(b) tax credits such as are mentioned in paragraph (b) of that sub-paragraph,

before the company’s self-assessment for the accounting period in question becomes final.

(1C) The second assumption is that in making any set off under—

(a) section 7(2),

(b) paragraph 5 of Schedule 16, or

(c) regulations made by virtue of section 51B,

income tax borne by deduction on income which is not referable to pension business is set off before income tax so borne on income which is referable to pension business.

(1D) In its application by sub-paragraph (1) above, section 30 of the Management Act shall have effect as if, instead of the provision made by subsection (5), it provided that an assessment under that section by virtue of sub-paragraph (1) above is not out of time under section 34 of that Act if it is made no later than the end of the accounting period following that in which the self-assessment mentioned in paragraph (a) of that sub-paragraph becomes final.]

(2) In this paragraph, “relevant interest” means interest—

(a) on so much of the excess referred to in sub-paragraph (1) above as is or was from time to time outstanding,

(b) for any period for which it is or was so outstanding, and

(c) at the rate applicable under section 178 of the Finance Act 1989 for the purposes of section 87A of the Management Act (interest on overdue corporation tax).

(3) In the application of section 87A of the Management Act in relation to an amount assessed to corporation tax under section 30 of that Act by virtue of this paragraph—

(a) the amount so assessed shall be taken to have become due and payable on the date on which that assessment was made; and

(b) the words [F5 “(in accordance with section 59D of this Act)”] in subsection (1) shall accordingly be disregarded.

(4) In determining the amount of any relevant interest, any question whether the excess mentioned in sub-paragraph (1) above (in the following provisions of this paragraph referred to as “the principal”) or any part of it is or was “outstanding” at any time shall be determined in accordance with sub-paragraphs (5) to [F6 (8)] below.

(5) So much of the principal as does not exceed the amount of the last provisional repayment made to the company for the accounting period in question shall be taken to have become outstanding on the date on which that provisional repayment was made.

(6) So much (if any) of the principal as—

(a) exceeds the amount of the provisional repayment referred to in sub-paragraph (5) above, but

(b) does not exceed the amount of the preceding provisional repayment for that accounting period,

shall be taken to have become outstanding on the date on which that preceding provisional repayment was made; and so on with any remaining portion of the principal and any preceding provisional repayments for that accounting period.

(7) So much (if any) of the principal as has become outstanding as mentioned in sub-paragraph (5) or (6) above and has at any time neither been repaid to the Board nor been assessed to corporation tax under section 30 of the Management Act by virtue of this paragraph shall be taken to remain outstanding at that time (and an amount shall accordingly be taken to cease being outstanding only when it is repaid to the Board or when it is so assessed).

[F7 (8) For the purposes of sub-paragraph (7) above, any repayment made by the company in respect of an amount paid or repaid to it in respect of—

(a) income tax such as is mentioned in paragraph (a) of sub-paragraph (1A) above, or

(b) tax credits such as are mentioned in paragraph (b) of that sub-paragraph,

shall be treated as a repayment in respect of the principal, taking an earlier such repayment by the company before a later.

(9) In this paragraph “self-assessment” means an assessment included in a return under section 11 of the Management Act by virtue of section 11AA of that Act and includes a reference to such an assessment as amended.]

Textual Amendments

F2 Sch. 19AB inserted (25.7.1991 with effect as mentioned in s. 49(3) in relation to accounting periods beginning on or after 2.10.1992) by Finance Act 1991 (c. 31, SIF 63:1), s. 49, Sch.8; S.I. 1992/1746, art.2

F3 Sch. 19AB para. 3(1)(a)(b) substituted (with effect in accordance with s. 169(3) of the amending Act) by Finance Act 1996 (c. 8), Sch. 34 para. 3(2)

F4 Sch. 19AB para. 3(1A)-(1D) inserted (with effect in accordance with s. 169(3) of the amending Act) by Finance Act 1996 (c. 8), Sch. 34 para. 3(3)

F5 Words in Sch. 19AB para. 3(3)(b) substituted (with effect in accordance with s. 169(3) of the amending Act) by Finance Act 1996 (c. 8), Sch. 34 para. 3(4)

F6 Word in Sch. 19AB para. 3(4) substituted (with effect in accordance with s. 169(3) of the amending Act) by Finance Act 1996 (c. 8), Sch. 34 para. 3(5)

F7 Sch. 19AB para. 3(8)(9) added (with effect in accordance with s. 169(3) of the amending Act) by Finance Act 1996 (c. 8), Sch. 34 para. 3(6)