Regulation 4 Amendments to the Principal Regulations

After Regulation 26B of the Principal Regulations there shall be inserted—

“Interest on tax overdue

26C

(1)

Subject to paragraph (2), where, in relation to the year ended 5th April 1993 or any subsequent year, an employer has not within 14 days after the end of a year paid to the Collector the total net tax deductible by him in respect of all his employees during that year, the tax not so paid shall carry interest at the prescribed rate from the reckonable date until payment.

(2)

Paragraph (1) above shall not apply to any tax in respect of which a direction under Regulation 26B(2) or (3) has been made.

(3)

In this Regulation “the prescribed rate” means the rate applicable under section 178 of the Finance Act 1989^f1 for the purposes of section 86 of the Taxes Management Act 1970; and where that rate changes on an operative date within the meaning given by Regulation 2 of the Taxes (Interest Rate) Regulations 1989^f2 by virtue of those Regulations, the change shall have effect for periods beginning on or after the operative date in relation to interest running from before that date as well as from or from after that date.

(4)

In this Regulation “the reckonable date”, in relation to any year, means the 14th day after the end of that year.

(5)

The tax payable to which paragraph (1) of this Regulation applies shall carry interest from the reckonable date even if that date is a non-business day within the meaning of section 92 of the Bills of Exchange Act 1882^f3.

(6)

Interest payable under this Regulation shall be recoverable as if it were an amount of tax which an employer is liable under Regulation 26 or 26A to pay to the Collector.

(7)

A certificate of the Collector that any amount of interest payable under this Regulation has not been paid to him, or, to the best of his knowledge and belief, to any other Collector or to any person acting on his behalf or on behalf of another Collector, shall be sufficient evidence that the sum mentioned in the certificate is unpaid and due to the Crown.

(8)

Any document purporting to be a certificate within paragraph (7) shall be deemed to be such a certificate until the contrary is proved.

Interest on tax overpaid

26D

(1)

Where tax in respect of the year ended 5th April 1993 or any subsequent year is repaid to an employer in the circumstances specified in paragraph (2), the tax repaid shall carry interest at the prescribed rate from the relevant time until the order for the repayment is issued.

(2)

The circumstances specified in this paragraph are where the tax is repaid—

(a)

after the end of the year following that in respect of which the tax was paid, and

(b)

after the end of the year in which the tax was paid.

(3)

In this Regulation “the prescribed rate” means the rate applicable under section 178 of the Finance Act 1989 for the purposes of section 824 of the Income and Corporation Taxes Act 1988^f4; and where that rate changes on an operative date within the meaning given by Regulation 2 of the Taxes (Interest Rate) Regulations 1989 by virtue of those Regulations, the change shall have effect for periods beginning on or after the operative date in relation to interest running from before that date as well as from or from after that date.

(4)

In this Regulation “the relevant time” means—

(a)

in the case of a repayment of tax which was paid more than twelve months after the end of the year in respect of which the payment was made, the end of the year in which that tax was paid; and

(b)

in any other case, the end of the year after the year in respect of which the payment was made.”.