PART IX INTEREST ON OVERDUE TAX
88 Interest on tax recovered to make good loss due to taxpayer’s fault.
(1)
Where an assessment has been made for the purpose of making good to the Crown a loss of tax wholly or partly attributable to
[(a)
a failure to give a notice, make a return or produce or furnish a document or other information required by or under the Taxes Acts, or
(b)
an error in any information, return, accounts or other document delivered to an inspector or other officer of the Board F1,]
the tax charged by the assessment, or as the case may be such part thereof as corresponds to the part so attributable, [shall, if an inspector or the Board so determine, carry F2] interest at the [rate applicable under section 178 of the Finance Act 1989 F3] from the date on which the tax ought to have been paid until payment .
M1(2)
This section shall not apply in relation to [] tax under Schedule [13 or 16 to the principal Act F4].
[(3)
Where it is finally determined that any tax carries interest under this section, the tax shall carry no interest under section 86 or 86A above, (and, accordingly, any interest under either of those sections which has been paid before the final determination shall be set off against the amount of the interest under this section); and for the purposes of this subsection a determination that tax carries interest is not final until it can no longer be varied, whether by any Commissioners on appeal or by the order of any court F5.]
M2(4)
The Board may at their discretion mitigate (whether before or after judgment) any interest due under this section and may stay or compound any proceedings for the recovery thereof.
M3(5)
For the purposes of this section thedate when tax ought to have been paid shall be taken to be—
(a)
in the case of income tax, 1st January in the year of assessment for which the tax is charged, but subject to paragraphs (b) and (c) below,
(b)
in the case of one-half of any income tax specified in section [5(2) F6] of the principal Act, the following 1st July,
[(c)
M4(d)
in the case of capital gains tax, [1st December F7] in the year of assessment next following the year for which the tax is charged,
M5(e)
(f)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F11
[(6)
Tax charged by an assessment mentioned in subsection (1) above shall carry interest from the date when it ought to have been paid even if that date was a non-business day within the meaning of section 92 of the Bills of Exchange Act 1882 F12.]
(7)
In paragraph (a) of subsection (1) above the reference to a failure to do something includes, in relation to anything required to be done at a particular time or within a particular period, a reference to a failure to do it at that time or within that period; and, accordingly, section 118(2) of this Act shall not apply for the purposes of that paragraph F13.]