C11C10C18C20 PART IX INTEREST ON OVERDUE TAX
Pt. IX applied (27.7.1993 with effect in relation to the year 1993-94 and subsequent years of assessment) by Finance Act 1993 (c. 34), s. 122(2)(3)
Pt. 9 applied by Taxation of Chargeable Gains Act 1992 (c. 12), s. 281(5)(a) (as substituted (with effect in accordance with Sch. 18 para. 17 of the amending Act) by Finance Act 1996 (c. 8), Sch. 18 paras. 15(2), 17)
Pt. 9 modified (with effect in accordance with s. 117(4)(5) of the amending Act) by Finance Act 1998 (c. 36), Sch. 18 para. 39(2)(a) (with Sch. 18 para. 59(2)); S.I. 1998/3173, art. 2
C12C21C1C16C17C23C25C2686F30 Interest on overdue income tax and capital gains tax.
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 F31section 92 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
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 F34or, in respect of income tax assessed under section 29 of this Act, in accordance with section 59B(6) 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.
F186A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C387F5Interest on overdue advance corporation tax and income tax on company payments.
C2C151
2
Where—
F42a
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
b
income tax paid in respect of payments made in any return period is repaid or discharged under paragraph 5 of the said Schedule [F216] 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.
F44
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F465
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6
C27
It is hereby declared that this section applies to F44... income tax which, in accordance with F45the said Schedule 16, 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.
C2C4F68
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.
C13C14C19C22C2887AF7Interest on overdue corporation tax etc.
1
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 M1Bills of Exchange Act 1882.
3
In relation to corporation tax assessed F59or treated as assessed by virtue of section F9346(2) or 347(1) of the principal Act, F10137(4), 139(7) F60or 190F62... of the 1992 Act F61... F57paragraph 75A(2) of Schedule 18 to the Finance Act 1998F63, 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.
F474
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F114A
In a case where—
a
there is for an accounting period of a company (“the later period”) F35a non-trading deficit on the company’s loan relationships,
b
as a result of a claim under F36section 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
F27c
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,
F28then, 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 F50as mentioned in subsection (8) below.
F484B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
A sum assessed on a company by such an assessment as is referred to in F12section 252(5) of the principal Act (recovery of payment of tax credit or interest on such a payment) shall carry interest at the F13rate 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.
F146
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 F53as mentioned in subsection (8) below.
F497
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F518
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.
F529
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).
F3788 Interest on tax recovered to make good loss due to taxpayer’s fault.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F3888A Determinations under section 88.
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F2489 The prescribed rate of interest.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C5C6C7C24C2790 Disallowance of relief for interest on tax.
F561
Interest payable under this Part of this Act
F56a
shall be paid without any deduction of income tax and
F552
Paragraph (b) of subsection (1) above does not apply in relation to interest under section 87 or 87A of this Act payable by a company within the charge to corporation tax.
C27C2491 Effect on interest of reliefs.
1
Where any amount of interest is payable under section 86 F39... 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 F40that section in relation to the assessment, as are necessary to secure that the total sum, if any, paid or payable under F40that section in relation to the assessment is the same as it would have been if the tax discharged had never been charged.
F151A
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
2
F25Subject to subsection (2A) below Where relief from tax F17... 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.
F182A
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 F1910 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—
F20a
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
b
affecting tax charged by any assessment to income tax made under Schedule A or Schedule D if either—
F20i
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 F22or
C84
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 .
F2391A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
92 Remission in certain cases of interest on tax in arrear by reason of exchange restrictions.
C91
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.
C92
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.
C93
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.
Pt. IX modified by The Income Tax (Entertainers and Sportsmen) Regulations 1987 (S.I. 1987/530), reg. 11(3)