C7C6C12C14C34 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
Pt. 9 applied (with modifications) (22.7.2020) by Finance Act 2020 (c. 14), Sch. 16 para. 11(3)
C8C15C1C10C11C16C18C20C23C28C2986F22 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.
C302
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 F23section 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 F26or, 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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C19C2187F48Interest on overdue income tax deducted at source
1
Income tax which is assessable under Chapter 15 of Part 15 of ITA 2007 carries interest at the rate applicable under section 178 of the Finance Act 1989 from the date when it was due under section 951 of ITA 2007 until payment.
2
Subsection (1) applies—
a
whether or not an assessment is made, and
b
whether or not income tax which is assessed has been paid when the assessment is made.
3
Subsection (1) applies even if the date when the income tax should have been paid is a non-business day as defined by section 92 of the Bills of Exchange Act 1882.
4
Subsection (5) applies to any income tax which—
a
was payable under Chapter 15 of Part 15 of ITA 2007 (collection: deposit-takers, building societies and certain companies) in respect of payments within section 946 of that Act made in a return period,
b
was not paid on the date when it was due under section 951 of that Act, and
c
has subsequently been discharged or repaid under section 953 of that Act because the person who made the payments received payments on which it suffered income tax by deduction in a later return period.
5
The income tax carries interest under subsection (1) from the date when it was due under section 951 of ITA 2007 until the earliest of—
a
the date when the income tax was paid,
b
the date when the person delivered a return for the later return period, and
c
the expiry of 14 days after the end of that period,
but subsection (1) does not otherwise apply to the income tax.
6
In this section “return period” means a period for which a return is required to be made under Chapter 15 of Part 15 of ITA 2007.
C9C13C17C22C3387AF2Interest 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 F42or treated as assessed by virtue of section F4346(2) or 347(1) of the principal Act, F5137(4), 139(7) F43or 190F45... of the 1992 Act F44... F41paragraph 75A(2) of Schedule 18 to the Finance Act 1998F46, F54... paragraph 69 of Schedule 29 to the Finance Act 2002F55or Chapter 7 of Part 22 of CTA 2010 (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.
F334
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F64A
In a case where—
a
there is for an accounting period of a company (“the later period”) F27a non-trading deficit on the company’s loan relationships,
b
F19c
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,
F20then, 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 F36as mentioned in subsection (8) below.
F344B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F585
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F76
In any case where—
a
on a claim under F56section 37 of CTA 2010, the whole or any part of a loss incurred in an accounting period (“the later period”) has been F57relieved (whether under that section or section 42 of that Act) 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 F39as mentioned in subsection (8) below.
F357
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F378
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.
F389
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).
F2988 Interest on tax recovered to make good loss due to taxpayer’s fault.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F3088A Determinations under section 88.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1689 The prescribed rate of interest.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C2C3C24C26C3190F53Interest on tax payable gross
F401
Interest payable under this Part of this Act
F51b
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F522
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C27C25C3291 Effect on interest of reliefs.
1
Where any amount of interest is payable under section 86 F31... 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 F32that section in relation to the assessment, as are necessary to secure that the total sum, if any, paid or payable under F32that section in relation to the assessment is the same as it would have been if the tax discharged had never been charged.
F81A
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
F17Subject to subsection (2A) below Where relief from tax F10... 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.
F112A
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 F1210 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—
F13a
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
b
affecting tax charged by any assessment to income tax made under Schedule A or Schedule D if either—
F13i
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 F14or
c
affecting tax charged at a rate other than the basic rateF59, F60the Scottish basic rate, a Scottish rate below the Scottish basic rate, the Scottish intermediate rate,F61the Welsh basic rate, the savings nil rateF49or the starting rate for savings on income from which tax has been deducted (otherwise than under F47PAYE regulations) or is treated as having been deducted, unless it is a relief from the tax so charged.
C44
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 .
F1591A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
92 Remission in certain cases of interest on tax in arrear by reason of exchange restrictions.
C51
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.
C52
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.
C53
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)