(1)Section 90 of the M1Taxes Management Act 1970 (interest on overdue tax to be paid without deduction of income tax and not to be allowed as a deduction in computing income, profits or losses) shall be amended as follows.
(2)At the beginning there shall be inserted “(1)" and in the subsection (1) so formed—
(a)after “Interest payable under this Part of this Act" there shall be inserted “ (a) ”; and
(b)after “and" there shall be inserted “ (b) ”.
(3)At the beginning of the paragraph (b) formed by subsection (2)(b) above (disallowance of relief for interest) there shall be inserted “subject to subsection (2) below,".
(4)At the end of the section there shall be added—
“(2)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.”
(5)The amendments made by subsections (3) and (4) above have effect in relation to—
(a)interest on corporation tax for accounting periods ending on or after the day appointed under section 199 of the M2Finance Act 1994 for the purposes of Chapter III of Part IV of that Act (corporation tax self-assessment); and
(b)interest on tax assessable in accordance with Schedule 13 or 16 to the Taxes Act 1988 for return periods in accounting periods ending on or after that day.