Explanatory note

This Order comes into force on 20th May 2014 and has effect in relation to payments in respect of Class 1 national insurance contributions and payments deducted under section 61 of the Finance Act (“FA”) 2004 (c. 12) (“CIS payments”) made on or after 20th May 2014 which are for the tax year 2014-15 or for a later tax year.

In relation to payments of income tax deducted at source, Class 1 national insurance contributions and CIS payments, the Treasury appointed 6th May 2014 as the date on which sections 101 and 102 of FA 2009 (c. 10) come into force (see S.I. 2014/992). As a consequence any such payment which is not paid to the Commissioners for Her Majesty’s Revenue and Customs (“HMRC”) by the due date (which is set out in the relevant legislation) is liable to late payment interest under the single interest regime in section 101 of FA 2009. Any amount which is overpaid will attract repayment interest under the single repayment interest regime in section 102 of FA 2009 when repaid by HMRC.

Article 2 and the Schedule provide for consequential amendments to primary legislation. As a consequence of the amendments made by paragraphs 1, 3, 5 and 6 of the Schedule where an employer or a contractor fails to make a payment to HMRC of Class 1 national insurance contributions or of a CIS payment, by the due date, the employer or contractor will not be entitled to take any interest paid on those sums into account when computing income, profits or losses for tax purposes. The amendment made by paragraph 2 amends the Social Security Administration Act 1992 (“SSAA”) (c. 5) and the amendment made by paragraph 4 amends the Social Security Administration (Northern Ireland) Act 1992 (“the Northern Ireland Act”) (c. 8) to reflect that where the specified amount for which an officer of a company is made personally liable (under section 121C of SSAA or section 115B of the Northern Ireland Act) is in respect of Class 1 contributions, interest is charged at the rate applicable under section 101 or 102 of FA 2009.

A Tax Information and Impact Note has not been prepared for this Instrument as it gives effect to previously announced policy.