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An Order of the Board of Inland Revenue was issued on 23 April
2001 specifying changes to the rates of interest on tax and
national insurance contributions paid late and overpaid in accordance
with the relevant regulations. The changes are as a result of
recent changes in market rates.
The new rates of interest, detailed below, will take effect
from 6 May 2001 whether or not interest has already started
to run before that date.
Details
Income Tax, National Insurance Contributions, Capital Gains
Tax, Stamp Duty, Stamp Duty Reserve Tax etc.
The rate of interest charged on income tax, national insurance
contributions, capital gains tax, stamp duty and stamp duty
reserve tax paid late and on tax charged by an assessment for
the purpose of making good to the Crown a loss of tax wholly
or partly attributable to failure or error by the taxpayer has
decreased from 8.5 per cent to 7.5 per cent.
The rate of interest on overpaid income tax, national insurance
contributions, capital gains tax, stamp duty and stamp duty
reserve tax (repayment supplement) has decreased from 4 per
cent to 3.5 per cent.
Petroleum Revenue Tax, Development Land Tax, Advanced Corporation
Tax etc.
The rate of interest for Development Land Tax, Petroleum Revenue
Tax (including Supplementary Petroleum Duty and Advanced Petroleum
Revenue Tax), and on Advance Corporation Tax and Income Tax
on Company Payments which became due on or before 13 October
1999 paid late or overpaid has decreased from 6.5 per cent to
5.75 per cent.
Income Tax on Company Payments which became due on or after
14 October 1999
The rate of interest on late payment of Income Tax on Company
Payments which became due on or after 14 October 1999 has decreased
from 8.5 per cent to 7.5 per cent.
Inheritance Tax
The rate of interest for late payments or repayments of Inheritance
Tax, Capital Transfer Tax and Estate Duty has decreased from
5 per cent to 4 per cent.
Corporation Tax
The rate of interest charged on unpaid Corporation Tax for
accounting periods ending on or after 1 October 1993 (under
CT (Pay and File)) has decreased from 6.75 per cent to 6 per
cent.
The rate of interest paid on overpaid Corporation Tax for accounting
periods ending on or after 1 October 1993 (under CT (Pay and
File)) has decreased from 3.5 per cent to 2.75 per cent.
The rate of interest for either late payments or repayment of
Corporation Tax for accounting periods ended on or before 30
September 1993 (pre Pay and File CT), has decreased from 6.5
per cent to 5.75 per cent.
The rate of interest on unpaid Corporation Tax for accounting
periods ending on or after 1 July 1999 (other than underpaid
CT instalments) has decreased from 8.5 per cent to 7.5 per cent.
The rate of interest on overpaid Corporation Tax for accounting
periods ending after 1 July 1999, in respect of periods after
the normal due date, has decreased from 5 per cent to 4 per
cent.
Further Details
1. Section 178 Finance Act 1989 and Statutory Instrument SI
1989 No.1297 entitled The Tax (Interest Rate) Regulations 1989
lay down the procedures and formulae for calculating and amending
Inland Revenue interest rates.
2. The revised interest rates are based on the average base
lending rate of 5.5 per cent, calculated in accordance with
the Statutory Instruments.
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