COM80013 - Interest: how interest is calculated: legislation
The legislation in respect of charging interest is as follows. The table below gives a brief explanation of what the legislation relevant to this subject contains.
Section | Explanation |
---|---|
S87A TMA 1970 (as extended by regulation 7) of Corporation Tax (Instalments Payments) Regulations SI 1998, No 3175 | Debit interest is charged on late or insufficient payment of instalments from the quarterly instalment due dates to the date of payment or normal due date. |
S87A TMA 1970 (as extended by regulation 8) of Corporation Tax (Instalments Payments) Regulations SI 1998, No 3175 | Credit interest is charged on early or excessive payments of corporation tax from the quarterly instalment due dates to the date of payment or normal due date. |
Regulations 4, 5 and 7 Corporation Tax (Instalment Payments) Regulations 1998 (Statutory Instrument 3175) | The due and payable date for a CT instalment. |
10(1) ICTA 1988 | The normal due and payable date for a CT Pay and File AP CT is nine months and one day after the end of the AP. |
18 CTA 2010 | Deals with claims to the small companies’ rate of Corporation Tax. |
239(3) ICTA 1988 | Claim to carry back surplus ACT and treat it as ACT paid in respect of an AP beginning in the previous six years. |
342 (3A) ICTA 1988 | Allows a company in liquidation to receive interest up to £2,000 and not include it in profits chargeable for CT purposes. |
393A ICTA 1988 | Allows a company to carry back a trade loss, for losses arising in APs ending in the period from 01 April 1991 to 01 July 1997:\n- that cannot be utilised against profits arising in the AP in which the loss is incurred\n- for up to three years preceding the loss period. |
455 CTA 2010 (formerly 419 ICTA 1988) | Liability to tax when a close company makes a loan or advance to a participator or an associate of a participator. |
455(3) (formerly 419(3) ICTA 1988) | Determines the due date for tax due under S455 CTA 2010. |
458 CTA 2010 | Relief in terms of tax against a liability under S455 CTA 2010 or S419 ICTA 1988 when the loan or advance to the participator has been repaid (or repaid in part) on or after 1 April 2010. |
419(4) ICTA 1988 | Relief in terms of tax against a liability under S419 ICTA 1988 when the loan or advance to the participator has been repaid (or repaid in part) before 1 April 2010. |
83(2) FA 1996 | Allows a company to carry back a non trading deficit arising in APs ending in the period from 01 April 1996 to 01 July 1997:\n- that cannot be utilised against profits arising in the AP in which the non trade deficit is incurred\n- for up to three years preceding the non trade deficit period. |
39 F(No2)A 1997 | Amends S393A ICTA 1988, so that losses arising in APs ending on or after 02 July 1997, may only be carried back for a period of one year. |
40 F(No2)A 1997 | Amends 83(2) FA 1996, so that non trading deficits arising in APs ending on or after 02 July 1997, may only be carried back for a period of one year. |
59D(1) TMA 1970 | The normal due and payable date for CTSA AP is nine months and one day after the end of the AP. |
87A TMA 1970 | Late payment interest is charged from the normal due date to the date of payment. |
87A(4) TMA 1970 | Interest on ACT carried back runs to the normal due date of the AP from which it was carried back. |
87A(4A) TMA 1970 | Interest when a non-trading deficit is carried-back to an earlier AP runs to the normal due date of the AP from which it was carried back. |
87A(4B) TMA 1970 | When ACT that becomes surplus as a result of the carry-back of a non-trading deficit is itself carried-back, interest runs to the normal due date of the AP from which the non-trading loss was carried back. |
87A(6) TMA 1970 | Provides that the carry-back of a trading loss is not effective for interest purposes until the normal due date for the AP in which the loss is incurred, unless the carry-back is to a period that falls wholly within the twelve months before the AP in which the loss is incurred. |
87A(7) TMA 1970 | ACT that becomes surplus as the result of loss relief being carried back may be carried back to a still earlier AP. Interest on the displaced ACT runs to the normal due date of the AP from which the loss was carried back. |