The Taxes and Duties, etc (Interest Rate) Regulations 2011
Citation and commencement1.
These Regulations may be cited as the Taxes and Duties, etc (Interest Rate) Regulations 2011 and come into force on 31st October 2011.
Interpretation2.
In these Regulations—
“Bank of England rate” means the official bank rate as announced at the relevant meeting;
“operative date” means the 13th working day following the relevant meeting;
Late payment interest rate3.
(1)
Bank of England rate + 2.5.
(2)
The interest rate found under paragraph (1) applies on and after the operative date.
Repayment interest rate4.
(1)
(a)
0.5% per annum; and
(b)
the percentage per annum found by applying the following formula—
Bank of England rate – 1.
(2)
The interest rate found under paragraph (1) applies on and after the operative date.
Initial rates of interest5.
(1)
This regulation applies immediately on the coming into force of these Regulations until the first operative date after the coming into force of these Regulations.
(2)
The late payment interest rate and repayment interest rate shall be the respective percentages per annum found by applying regulation 3(1) and regulation 4(1) as if the references in those regulations to the Bank of England rate were references to the official bank rate announced at the meeting of the Bank of England Monetary Policy Committee on, or most recently before, the 13th working day before the coming into force of these Regulations.
Effect of change in rates of interest6.
Where the late payment interest rate or repayment interest rate changes in accordance with these Regulations with effect from an operative date, the change has effect in respect of interest running from before that date as well as interest running from or after that date.
Earlier instrument revoked7.
These Regulations specify the rates of interest which have effect for the purposes of sections 101 and 102 of the Finance Act 2009 which deal respectively with interest on sums payable to Her Majesty’s Revenue and Customs (“HMRC”) and interest on sums payable by HMRC.
The interest rates set by the Regulations are determined by reference to the official bank rate as announced at the most recent meeting of the Bank of England Monetary Policy Committee.
Regulation 3 sets the interest rate on sums payable to HMRC.
Regulation 4 sets the interest rate on sums payable by HMRC and provides a minimum rate of interest.
Regulation 5 provides for initial rates of interest that will apply on the coming into force of these Regulations.
Regulation 6 provides that where the respective interest rates change, the revised rate has effect from the date of the change in relation to interest which began to run before the effective date of the change as well as interest beginning to run on or after the date of the change.
Regulation 7 revokes the earlier instrument which made similar provision.
A full impact assessment of the effect that this instrument will have on the costs of business and the voluntary sector is available through the HMRC website at www.hmrc.gov.uk/better-regulation/ia.htm and is published with the Explanatory Memorandum alongside the instrument on www.legislation.gov.uk.