# The Taxes (Interest Rate) Regulations 1989, Regulation 3: Applicable rate of interest on unpaid tax, tax repaid and repayment supplement

Extent: E+W+S+N.I.

(1) For the purposes of–
(a) sections 86, 86A, 87 and 88 of the Taxes Management Act 1970,
(b) paragraph 3 of Schedule 16A to the Finance Act 1973;
(c) paragraphs 15 and 16 of Schedule 2, and paragraph 8 of Schedule 5, to the Oil Taxation Act 1975,
(d) section 47 of the Finance (No. 2) Act 1975,
(e) paragraph 59 of Schedule 8 to the Development Land Tax Act 1976,
(f) section 92 of the Finance Act 1986, and
(g) sections 824 and 825 of, and paragraph 3 of Schedule 19A to, the Income and Corporation Taxes Act 1988,
the rate applicable under section 178 shall, subject to paragraph (2), be 12.25 per cent. per annum.
(2) Where, on a reference date after the coming into force of these Regulations, the reference rate found on that date differs from the established rate, the rate applicable under section 178 for the purposes of the enactments referred to in paragraph (1) shall, on and after the next operative date, be the percentage per annum found by applying the formula specified in paragraph (3) and, if the result is not a multiple of one-quarter, rounding the result down to the nearest amount which is such a multiple.
(3) The formula specified in this paragraph is–
(RR+2.5)(100-BR),100 where RR is the reference rate referred to in paragraph (2) and BR is the percentage at which income tax at the basic rate is charged for the year of assessment in which the reference date referred to in that paragraph falls.

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Source: https://www.legislation.gov.uk/uksi/1989/1297/regulation/3 (the official version)
Page: https://openlegislation.uk/taxes-interest-rate-regulations-1989/regulation-3
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.