(This note is not part of the Regulations)
These Regulations, made under powers contained in section 178 of the Finance Act 1989, make provision for the rate of interest applicable for the purposes of paragraph 6B of Schedule 3 to the Income and Corporation Taxes Act 1988 for periods beginning on or after 14th November 1992.
Subsection (1) of section 178 of the 1989 Act provides that the rate of interest for the enactments to which that section applies is to be the rate provided for by regulations made by the Treasury under that section. The Regulations so made are the Taxes (Interest Rate) Regulations 1989 (S.I. 1989/1297) (“the 1989 Regulations”). Regulation 3 of the 1989 Regulations specifies the interest rate applicable under section 178 in relation to various enactments which apply to unpaid income tax, surtax, capital gains tax, corporation tax (including advance corporation tax), petroleum revenue tax and development land tax, repayments of petroleum revenue tax, overpaid development land tax and stamp duty reserve tax and repayment supplement. It also makes provision for changes in the applicable interest rate and for the formula to be used in calculating the new rate.
These Regulations provide for paragraph 6B of Schedule 3 to be one of the enactments to which regulation 3 of the 1989 Regulations applies.
Paragraph 6A and 6B of Schedule 3 to the 1988 Act were both inserted by paragraph 2(2) of Schedule 11 to the Finance (No. 2) Act 1992. Paragraph 6B provides that any tax due under paragraph 6A shall carry interest, at the rate applicable under section 178 of the 1989 Act, from the date on which it becomes due until it is paid. Paragraph 6A applies to transactions falling within paragraph 6 (the payment of public revenue dividends, foreign dividends and proceeds of coupons) and provides that income tax (at the basic rate in force at the time of payment) shall become due in respect of the relevant dividends or proceeds on the fourteenth day following the month in which the transaction is effected.