Taxes Management Act 1970

[87A F1 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 section [F3 10] of the principal 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 [F4 346(2) or 347(1) of the principal Act, section 267(3C) or 278(5) of the Income and Corporation Taxes Act 1970][F5 , section 96(8) of the Finance Act 1990] or section 87(4) of the M2 Capital Gains Tax Act 1979 (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) 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 [F6 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 [F6 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).

(5) A sum assessed on a company by such an assessment as is referred to in [F7 section 252(5) of the principal Act] (recovery of payment of tax credit or interest on such a payment) shall carry interest at the [F8 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.

[F9 (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”) is 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, 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 claim, 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.]

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. Previously “prescribed rate”. And see S.I. 1989/1297 for regulations made, and interest rate set, under Finance Act 1989, s. 178

F3 Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), s. 844, Sch. 29 para. 10(4)(a). Previously “243(4)”

F4 Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), 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”.

F5 Finance Act 1990, s. 96(12)

F6 Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), s. 844, Sch. 29 para. 10(4)(c)(d). Previously “85 of the Finance Act 1972” and “85” respectively.

F7 Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), s. 844, Sch. 29 para. 10(4)(d). Previously “subsection (2) of section 102 of the Finance Act 1972”

F8 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

F9 S. 87A(6) added (25.7.1991) by Finance Act 1991 (c. 31), s. 73(3)(4)(5), Sch. 15 para.2

Modifications etc. (not altering text)

C1 S. 87A modified (25.7.1991) by Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), s. 438A, Sch. 19B, para. 3 (which was added (25. 7. 1991) by Finance Act 1991 (c. 31, SIF 63:1), s. 49, Sch.8)

C2 S. 87A extended (with modifications) (25.7.1991) by Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), s. 438A Sch. 9B para. 5(6) (which was added (25.7.1991) by Finance Act 1991 (c. 31, SIF 63:1), s. 49, Sch.8)

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

Marginal Citations

M1 1882 c. 61.

M2 1979 c. 14.